The S&P 500 surged on Friday as further indications of cooling inflation solidified bets that the Federal Reserve will decelerate its rate increases when they convene next week. The S&P 500 rose 0.6%, the Dow Jones Industrial Average increased 0.3%, or 106 points, and the Nasdaq Composite spiked 1.2%.
The personal consumption expenditures, or PCE price index, unexpectedly grew by just 0.1% in December, lower than projections of a 0.2% rise. Meanwhile, core PCE (which excludes food and energy and is the Fed’s preferred inflation gauge) was consistent with expectations at 0.3%, though it had dropped to 4.4% for the 12 months through December from 4.7% previously.
Analysts at Pantheon Macroeconomics noted that this slowing in core inflation is likely due to improving supply chains rather than the repercussions of FED tightening policies, which will take time to take effect.
Report from AEC
American Express Company (NYSE:AXP) reported quarterly results and guidance that exceeded Wall Street predictions, leading to a jump of 12% in the stock’s price. In addition, the credit card giant also announced an impressive 15% dividend hike.
In contrast, energy stocks underperformed the overall market rally as oil prices saw a dip and Chevron (NYSE:CVX) registered a 4% decline after revealing quarterly earnings that fell short of expectations, resulting from rising costs and writedowns.
In other news, Adani Enterprises Ltd (NS:ADEL) endured an unprecedented week as losses soared to more than $50 billion due to Hindenburg Research’s short position in the stock, backed by accusations of accounting fraud and stock manipulation from the short-seller.
