S&P 500 rises as tech rally keeps stocks on track for strong quarterly gains

(C) Reuters

By Yasin Ebrahim

Investing.com — The S&P 500 rallied Friday, to remain on course to wrap up a strong first quarter of gains, led by growth stocks including tech as signs of cooling but still-elevated inflation pushed Treasury yields lower.

The S&P 500 rose 1%, the Dow Jones Industrial Average added 0.8%, or 273 points, and the Nasdaq gained 1.3%, and it’s set for a nearly 20% gain for Q1.

The core personal consumption expenditures price index, which excludes food and energy and is the Fed’s preferred inflation gauge, increased 0.3% in February just below the 0.4% expected.

A deeper dive into the data, meanwhile, showed the core services ex-rent component increased 0.27% in February, the “best since an out-of-the-blue dip in July last year,” Pantheon Macroeconomics said.

The U.S. 10-year Treasury yield fell five basis points to 3.51%, helping growth sectors of the market, though it is expected to remain range bound.

“The 10-year TSY yield remains stuck in a broad trading range,” Janney Montgomery Scott said. “Continue to watch 3.30% as support on the 10-year; initial resistance remains at 3.60%, then closer to 4% in our view,” it added.

Tesla (NASDAQ:TSLA) was the biggest gainer among consumer stocks, rising more than 5% followed by CarMax (NYSE:KMX) and Caesars Entertainment Corporation (NASDAQ:CZR).

Tech, which is on track for a 20% rise in Q1, was lifted by a rise in Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL), while semiconductor stocks also underpinned the broader move higher.

NVIDIA Corporation (NASDAQ:NVDA) rose more than 1% adding to the swashbuckling 89% gain seen in the quarter, with the chipmaker riding high on the coattails of a strong interest in generative AI that is expected to boost its chip demand.

On the earnings front, BlackBerry’s (NYSE:BB) narrower than expected loss overshadowed revenue that missed Wall Street estimates, sending the share price more than 15% higher.

ELF Beauty (NYSE:ELF) jumped more than 3% after Morgan Stanley upgraded its price target on the cosmetic company to $94 from $75, citing favorable Q1 sales data.

In other news, Virgin Orbit Holdings Inc (NASDAQ:VORB) sank 40% as it announced it would be shutting down operations and cutting about 90% of staff after attempts to secure funding failed.

The strong quarterly gains for the broader market come even as investors had to contend with turmoil in banks that has subsided somewhat after the Federal Reserve and U.S. government stepped up to support the industry.