S&P 500 and Nasdaq Rally in Stock Market Today
The S&P 500 and Nasdaq composite continued their rally in the stock market today. After briefly reaching the 5,000 level on Thursday, the S&P 500 once again edged above this key level in morning trade. Top gainers in the S&P 500 included Applied Materials (AMAT), which saw a more than 2% increase ahead of next week’s earnings report.
The Dow Jones industrials saw a slight dip nearly one hour into the session, but technology stocks such as Intel (INTC), Salesforce (CRM), Microsoft (MSFT), and IBM (IBM) defied the trend with gains of at least 0.6%. CRM stock recently reached the 20% profit-taking zone after surpassing a buy point of 238.22 in late November. A strong earnings report was the catalyst for this increase.
Futures Strengthen, Inflation Revised Slightly Lower
Before the opening bell, futures strengthened a bit as a December reading on inflation was revised slightly lower. The December CPI inflation rate was revised to a monthly gain of 0.2% from 0.3%, while the December core CPI remained unchanged with a 0.3% increase. The fourth-quarter core CPI also remained unchanged with a 3.3% annualized increase.
Nasdaq Composite and S&P 500 Continue to Climb
The Nasdaq composite held a 0.6% gain in the early part of the trading day. Top gainers in the Nasdaq 100 included software firms MongoDB (MDB) and Datadog (DDOG) with gains of around 4%.
The S&P 500 climbed 0.3% to reach 5,012 as of 10:45 a.m. ET.
The Russell 2000 small-cap index also experienced growth, adding 0.5% after a bounce off the 50-day moving average on Thursday.
Advancing stocks slightly outnumbered decliners on the Nasdaq by less than 2-to-1, and winners and losers were evenly matched on the NYSE. Volume on the Nasdaq was significantly higher compared to the same time on Thursday, while NYSE volume was lower.
Bitcoin Rallies, Marathon Digital and Riot Platforms Soar
Bitcoin saw a rally of nearly 4%, reaching just over $47,100 after a significant gain on Thursday. Marathon Digital (MARA) also rallied, increasing by 7% after a 23% surge the previous day. Riot Platforms (RIOT) rose more than 5% after breaking through its 50-day moving average. The stock has seen a more than 20% increase this week. MicroStrategy (MSTR), which currently holds 190,000 bitcoins, saw a 5% increase and has also risen more than 25% this week.
Cloudflare Soars on Strong Earnings, Dexcom Slips
Cloudflare (NET) was a standout winner in the stock market today, with a gain of more than 20%. The company reported triple-digit earnings growth for the quarter, with adjusted profit more than doubling to 15 cents a share. Revenue also increased by 32% to $362.5 million. Cloudflare provides products that improve the speed and security of web applications routed through its global network.
In the MarketSmith Growth 250, Dexcom (DXCM) slipped more than 3% despite strong Q4 results. Adjusted profit rose 47% to 50 cents a share, and the company reported revenue of just over $1 billion, a 27% increase.
Affirm, Pinterest, and Expedia Fall on Earnings
Several companies experienced sharp declines on their earnings reports. Buy-now-pay-later firm Affirm (AFRM) slumped 9%, while Pinterest (PINS) and Expedia (EXPE) also fell sharply on disappointing results.
UiPath Shows Strength, 10-Year Yield Edges Up
UiPath (PATH) was a strong gainer in the MarketSmith Growth 250 after flashing an early buy signal on Thursday. The stock is near the top of an eight-week consolidation with a buy point of 26.53.
The 10-year Treasury yield edged up to 4.18%.
Crude Oil Futures Rise
West Texas Intermediate crude oil futures increased by 1% in the stock market today, reaching just over $77 a barrel.
Federal Reserve Chair Jerome Powell recently tempered rate-cut expectations, citing the need for inflation to make more progress toward the Fed’s target of 2%. Powell also mentioned that the economy is strong enough for the Fed to be patient with rate cuts. However, there are concerns that inflation could cause delays in rate cuts. The latest core Personal Consumption Expenditures index, one of the Fed’s preferred inflation indicators, came in at 2.9% compared to expectations of 3%.
Currently, fed funds futures traders at CME FedWatch are not expecting a rate cut at the March meeting. However, there is a 63% chance of at least a quarter-point cut at the May meeting, according to traders.
Analyst comment
Positive news. The S&P 500 and Nasdaq continued their rally, with technology stocks driving gains. Futures strengthened as inflation revised slightly lower. The Nasdaq and S&P 500 climbed, and the Russell 2000 small-cap index also grew. Bitcoin and related stocks saw a rally. Cloudflare soared on strong earnings, while Dexcom slipped. Several companies, including Affirm, Pinterest, and Expedia, fell on disappointing earnings. UiPath showed strength and crude oil futures rose. Fed Chair Powell tempered rate-cut expectations. The market is likely to continue its upward trend with technology stocks leading the way.
