The stock market reversed course on Friday, with major indexes surging higher after a positive inflation report helped investors brush off concerns over a looming partial government shutdown. The Dow Jones Industrial Average rose nearly 400 points, or 0.9%, while the S&P 500 and Nasdaq also climbed 0.8%.
Increased trading volume on both the New York Stock Exchange and Nasdaq reflected a strong market sentiment, with advancing stocks outpacing decliners by a wide margin. The rally came after the release of the Personal Consumption Expenditures (PCE) index, which showed inflation easing. The PCE index rose 0.1% month-over-month, slightly below expectations of a 0.2% increase. On an annual basis, it increased by 2.4%, also beating economist forecasts of 2.5%. Core inflation rose by 0.1% monthly and 2.8% annually, again coming in below expectations, providing some relief to investors.
This inflation data helped shift focus away from Thursday’s setback, when a government spending bill supported by President-elect Donald Trump failed to pass in the House, raising fears of a partial government shutdown over the weekend. However, investors were encouraged by the inflation news, pushing the market higher.
Treasury yields, which had surged earlier in the week, pulled back after the inflation report, with the yield on the 10-year note falling 5 basis points to 4.52%. Consumer sentiment also met expectations in December, with the University of Michigan survey reporting a reading of 74.
Trump Stock Tumbles, Nvidia Attempts Recovery
Meanwhile, Trump Media and Technology (DJT) stock saw a significant drop after reports that the president-elect had moved shares to a revocable trust. Shares fell to near the 50-day moving average, reflecting investor concerns.
In corporate earnings, FedEx (FDX) initially saw a strong boost, with its earnings topping expectations. However, the stock eventually gave up its gains and fell over 1%, following the company’s announcement to spin off its freight business. FedEx’s sales of $22 billion were down 1%, while its earnings of $4.05 were 1.5% higher than the previous year.
Carnival (CCL) posted a 3% gain after reporting strong fourth-quarter results. Earnings of 14 cents per share surprised analysts, who had expected just 8 cents. However, the stock had already moved past the profit zone.
In the pharmaceutical sector, Novo Nordisk (NVO) suffered a sharp decline of more than 20% after a late-stage clinical trial for its obesity drug failed to meet expectations. Meanwhile, rival Eli Lilly (LLY) surged 4%, but remained below its 50-day moving average.
Among the “Magnificent Seven” tech giants, Tesla (TSLA) managed a slight gain, reversing earlier losses, while Meta (META) also turned positive. However, other big names like Microsoft (MSFT), Amazon (AMZN), and Apple (AAPL) lagged behind in the session.
Nvidia Stock Shows Signs of Recovery
Nvidia (NVDA) made a comeback on Friday, building on a positive performance from Thursday. However, shares are still below their 50-day moving average, signaling that the stock faces challenges in regaining momentum.
Meanwhile, Nike (NKE) saw its stock fall after a disappointing earnings report, with sales down 8% to $12.4 billion and earnings per share declining by 24% from the previous year. Nike’s stock is currently facing resistance at a key level.
Overall, most healthcare and finance stocks in the Dow gained ground, while tech and retail stocks saw mixed performance. As the market continues to navigate inflation data and other economic pressures, investors remain watchful of how these trends will shape the future direction of the stock market.
