US close: Nasdaq jumps 2% as tech stocks surge

dl wall street new york city wall st nyc new york stock exchange nyse nasdaq us usa united states of america trading finance unsplash — Sharecast / Roberto Junior via Unsplash

US stocks bounced back strongly on Friday with the Nasdaq surging more than 2% with the Magnificent Seven tech giants providing a huge boost following strong results from Microsoft and Alphabet.

The S&P 500 jumped 1.02% while the Nasdaq surged 2.03%; however the Dow finished just 0.4% higher, with gains limited by heavy losses from heavyweight tech group Intel.

Markets were rising despite data showing that US inflation remained stickier than expected in March. The US personal consumption expenditure rate rose to 2.7% in March, according to the Bureau of Economic Analysis, up from 2.5% in February and higher than the 2.6% expected by economists, suggesting that inflationary headwinds were still building.

Core PCE, the Federal Reserve's preferred inflationary barometer, which strips out volatile food and energy, was unchanged at 2.8% per year; analysts had pencilled in a drop to 2.6%.

"US stocks have made more gains this afternoon, thanks mainly to the positive afterglow from last night’s big tech earnings," said chief market analyst Chris Beauchamp from IG. "But the persistence of inflation and its refusal to keep heading lower will be a major headache for US markets, and will cast a long shadow over next week’s Fed meeting.”

Elsewhere on the macro front, the University of Michigan's consumer sentiment index decreased to 77.20 points in April, down from a preliminary of 77.9 and March's 79.40 point print, which was the highest reading since July 2021. Both current conditions and expectations declined more than initially expected, while inflation expectations for the year ahead were revised higher to 3.2% from 3.1%.

Market movers

Google parent company Alphabet surged 10% on the back of better-than-expected first-quarter earnings, its first-ever dividend, and a $70.0bn buyback.

Software giant Microsoft shares climbed 2% after it reported third-quarter numbers that came in ahead of Wall Street expectations. Revenues were up 17% year-on-year while net income jumped 20%.

Nvidia and Amazon were also performing well, while Meta edged higher after the previous day's sell-off.

Chevron also beat on earnings estimates but saw profits fall on lower refining margins and natural gas prices, while Exxon Mobil was in the red after its quarterly numbers fell short of estimates for much the same reason.

lntel shares finished more than 9% lower after the chipmaker beat forecasts with first-quarter earnings but missed with its sales, and underwhelmed with its guidance for the current quarter.

Dow Jones - Risers

Microsoft Corp. (MSFT) $406.32 1.82%
Goldman Sachs Group Inc. (GS) $427.57 1.79%
Caterpillar Inc. (CAT) $343.55 1.59%
Dow Chemical Co. (DOW) $57.29 1.51%
Verizon Communications Inc. (VZ) $39.68 1.17%
Home Depot Inc. (HD) $335.24 0.94%
Walgreens Boots Alliance, Inc. (WBA) $17.70 0.57%
3M Co. (MMM) $91.85 0.46%
Salesforce.Com Inc. (CRM) $274.29 0.42%
Chevron Corp. (CVX) $165.90 0.37%