S&P 500, Nasdaq boosted by tech stocks after inflation data

The S&P 500 and Nasdaq Composite indices rose slightly on Friday supported by gains in technology stocks, after March inflation data came in line with expectations, despite continued pressures resulting from the conflict in the Middle East, while investors evaluate the tense truce between the United States and Iran. 

Data showed that consumer prices in the United States recorded their largest increase in nearly four years during the month of March, with oil prices rising due to the war and the continued pass-through of the impact of tariffs to prices. 

However, traders held on to their expectations that the Federal Reserve will keep borrowing costs unchanged this year, according to data compiled by the London Stock Exchange Group, retreating from their previous expectations which indicated two interest rate cuts during the year before the outbreak of the conflict. 

Brett Kenwell, U.S. investment analyst at eToro, said that the clear message when looking at inflation data alongside the Personal Consumption Expenditures (PCE) index data released on Thursday is that inflation remains stubborn, even with an optimistic assumption that the rise in energy prices will be a temporary pressure factor rather than a permanent shift in prices. 

He added that this may push policymakers to wait before taking any decisions, unless a more clear deterioration appears in the labor market or in the broader economy. 

In the same context, Mary Daly told Reuters on Thursday that the oil price shock resulting from the war with Iran may prolong the period of time necessary to return inflation to the central bank's target of 2%. 

By 10:15 AM U.S. Eastern Time, the Dow Jones Industrial Average fell by 109.60 points or 0.23% to reach 48,076.20 points, while the S&P 500 index rose by 10.56 points or 0.15% to 6,835.22 points, and the Nasdaq Composite index climbed by 123.70 points or 0.54% to reach 22,946.11 points. 

The information technology sector in the S&P 500 index was the largest supporter of the gains, as it rose by about 0.8% led by electronic chip manufacturing companies. Nvidia stock rose by 1.8%, while Broadcom stock increased by 4.4%. The Philadelphia SE Semiconductor Index also recorded a new record high of 8,926.08 points. 

But the weakness of financial sector stocks limited the gains of the benchmark index, as the sector declined by about 0.8%, affected by the decline in Goldman Sachs and Travelers shares, which also put pressure on the Dow Jones index. 

However, the main indices on Wall Street are heading toward achieving weekly gains, as the S&P 500 and the Dow Jones Industrial Average are on track to record their largest weekly rise since November and June respectively. 

Market sentiment during the week was supported by the two-week truce between Washington and Tehran, in addition to statements by Israeli Prime Minister Benjamin Netanyahu that he seeks to hold direct talks with Beirut. 

However, some cracks appeared in the truce mediated by Pakistan, as both parties exchanged accusations of breaching the ceasefire before the first round of talks scheduled for Saturday. 

Jeff Buchbinder, chief equity strategist at LPL Financial, said that the market has become heavily dependent on news headlines, noting that as long as the ceasefire continues and investors see a path toward a degree of stability in the Middle East, they will be able to overcome the disturbances. 

In separate data, a preliminary reading showed that the Consumer Sentiment Index issued by the University of Michigan reached 47.6 points in April, which is less than the expectations that amounted to 52 points according to a survey of economists conducted by Reuters. 

In company news, U.S.-listed shares of Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, rose by 2.7% after its first-quarter revenues exceeded market expectations. 

CoreWeave stock also climbed by 6.8% after announcing a multi-year agreement with Anthropic, in addition to pricing its convertible bond offering at a premium. 

Advancing stocks outnumbered declining ones by a ratio of 1.22 to 1 on the New York Stock Exchange, and by 1.07 to 1 on the Nasdaq. 

The S&P 500 index recorded 17 new 52-week highs against 18 new lows, while the Nasdaq Composite index recorded 84 new highs and 70 new lows.