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U.S. stocks rallied Friday as investors digested the latest inflation data, with signs of moderation in annual core inflation outweighing a slightly hotter-than-expected monthly reading. The report kept expectations for easier monetary policy in focus, helping push Treasury yields lower and supporting broad gains across the major indices. Meanwhile, crude oil prices fell sharply, with WTI dropping more than 2%, weighing on the Energy sector.
On Friday, the major indices in the U.S. finished higher.
The S&P 500 advanced 65.28pts (+0.86%) to 7656.98.
The Nasdaq 100 rose 264.926pts (+0.91%) to 29368.439.
The Dow gained 509.19pts (+0.98%) to 52573.29.
On the sector front, Technology (XLK), Industrials (XLI), and Communication Services (XLC) outperformed, while Utilities (XLU), Health Care (XLV), and Energy (XLE) lagged the most.
Looking at the latest U.S. inflation data, headline CPI held steady at 3.4% year-over-year in August, matching expectations and the previous month. Core inflation eased to 2.4% from 2.5% a year earlier, also in line with forecasts. However, core CPI rose 0.3% month-over-month, above the 0.2% increase expected and up from 0.2% previously, pointing to some underlying inflation pressure despite the moderation in the annual core rate.
U.S. Equity News:
SpaceX (SPCX), the aerospace, satellite communications and AI infrastructure company behind Starlink and Starship, has signed another cloud-computing capacity deal with an unidentified customer worth about $1.11 billion per month starting Dec. 1, CFO Bret Johnsen said at Goldman Sachs’ Communacopia + Technology Conference. The stock gained 2%.
Oracle (ORCL), an enterprise software and cloud computing company, slipped 1.74% despite reporting quarterly financial results that beat estimates. Oracle also raised its full-year earnings forecast, citing strong demand for AI cloud services.
Dell Technologies (DELL), Hewlett Packard Enterprise (HPE) and HP Inc. (HPQ) all jumped more than 10% Friday as strong enterprise AI demand and expectations for a PC refresh cycle boosted hardware shares. HPE received an additional lift from Oracle’s strong results and a new partnership that will see Oracle deploy HPE routing and switching technology across its data centres. RBC Capital Markets also initiated coverage on Dell with an Outperform rating and a $640 price target.
Volatility & Commodities Snapshot:
The VIX index dropped 2pts (-11.21%) to 15.84.
The U.S. 10-year Treasury yield fell 20.3 basis points to 4.971%.
In the commodities market, gold gained $33.96 (+0.79%) to $4,349.65.
Silver rose $0.82 (+1.29%) to $64.37.
WTI crude oil dropped $2.22 (-2.17%) to $100.26, with the decline adding pressure to Energy shares despite the broader equity-market rally.
Europe Market Overview:
At the European close, the major indices in the region finished in positive territory.
Germany's DAX gained 207pts (+0.82%) to 25568.
France's CAC 40 rose 63pts (+0.78%) to 8179.
The U.K.'s FTSE 100 advanced 41pts (+0.39%) to 10650.
On the economic data front, U.K. GDP rose 0.4% month-over-month in July, versus expectations for no change, after increasing 0.3% in June. U.K. industrial production also rose 0.2% month-over-month in July, versus a 0.2% decline expected, following a 0.2% contraction in the previous month.
Foreign Exchange & Crypto Wrap:
The U.S. dollar index edged up 0.08pt (+0.08%) to 99.124.
EUR/USD fell 16pips (-0.14%) to 1.1594.
GBP/USD advanced 17pips (+0.13%) to 1.3525.
USD/JPY declined 76pips (-0.49%) to 153.66.
USD/CHF gained 39pips (+0.48%) to 0.8164.
AUD/USD rose 15pips (+0.21%) to 0.7169.
USD/CAD advanced 36pips (+0.26%) to 1.3866.
Finally, in the cryptocurrencies market, Bitcoin gained $111 (+0.14%) to $77,375.
Ethereum jumped $76 (+3.11%) to $2,538.
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