4/12/2024

S&P 500 and Nasdaq surge after PPI

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Key points:

  • American stock indices rose, with shares of technology companies leading the way.
  • The market growth is driven by encouraging inflation data (PPI), which indicates a possible further slowdown.
  • The S&P 500 also closed higher, while the Dow Jones remained virtually unchanged.

American stock indices ended Thursday’s trading session in positive territory, with shares of technology companies leading the gain. The positive dynamics of the market were supported by encouraging data on inflation, which indicate its possible further slowdown.

Shares sensitive to changes in interest rates showed more dynamic growth, which led to the leadership of the tech-heavy Nasdaq index. The S&P 500 also closed in positive territory, while the Dow Jones remained virtually unchanged.

Published data on the producer price index (PPI) turned out to be lower than expected, confirming the trend towards a slowdown in price growth.

PPI data was encouraging for traders

The US stock market suffered a sharp decline on Wednesday following the release of higher-than-expected Consumer Price Index (CPI) data. The statistics dashed investors’ hopes that the central bank would make three interest rate cuts before the end of the year, possibly starting with its June monetary policy meeting.

As a result, stocks fell and Treasury yields hit their highest levels since November.

Producer price index (PPI) data was more encouraging, however, and still showed that the pace of inflation falling to the central bank’s 2% target may not be as fast as the Fed would like.

First quarter earnings season is ahead

Investors’ attention turns to first-quarter earnings season, which will feature results from the three largest U.S. banks: JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co. The reports are scheduled to be published Friday morning.

Among the 11 major sectors of the S&P 500 index, technology stocks (.SPLRCT) led the pack, while financial stocks were the worst performers.

Shares of Rent the Runway soared 161.9% after the clothing rental company announced plans to use artificial intelligence to fuel its growth this year.

Biotech firm Alpine Immune Sciences, which will be acquired by Vertex Pharmaceuticals for $4.9 billion, reported its quarterly results.

The S&P 500 hit 11 new 52-week highs and 6 new lows, while the Nasdaq Composite posted 51 new highs and 135 new lows. Total trading volume on US exchanges was 10.39 billion shares, below the average of 11.48 billion shares over the past 20 trading days.

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