(New York) The New York Stock Exchange ended higher on Friday, satisfied by reassuring news on inflation and a series of good results.
The Dow Jones (+0.55%) took advantage of this to set a new record, the fourth this week, while the NASDAQ index and the broader S&P 500 index gained 1.13% and 1.01% respectively.
New York had a volatile session, typical of the end of the month, with an opening in the green, a passage into the red and a recovery in the last minutes.
“Volumes were light today, which is to be expected ahead of a three-day weekend, but there was a bullish bias encouraged by good news and positive indicators,” commented Patrick O’Hare of Briefing.com.
Wall Street will be closed on Monday, the Labor Day holiday.
The PCE price index, considered the most relevant by the American central bank (Fed), came out at 2.5% over one year in July, unchanged compared to June and in line with expectations.
Excluding energy and food, it stood at 2.6%, less than economists had predicted (2.7%).
“The Fed’s preferred measure of inflation is close enough to 2% (its long-run target) that it should start cutting rates,” said Bill Adams of Comerica Bank.
The picture is almost idyllic, because at the same time, consumption has increased more than in June.
“This is not a recessionary economy,” Adams concluded.
While they do see a cut from the Fed next month, investors no longer believe much in the hypothesis of a half-point cut, preferring a quarter-point.
The move gave the dollar a small boost and tightened bond yields. The yield on 10-year US government bonds stood at 3.91%, compared with 3.86% the previous day at the close.
In addition to the macroeconomic news, Wall Street welcomed several corporate results.
Among them is the computer chip designer Marvell Technology (+9.16%), less well-known than the big names in semiconductors: its results have surpassed market projections, thanks to demand for artificial intelligence (AI).
Dell (+4.33%) also reported figures above analysts’ forecasts, and raised its annual targets.
Initially known for its personal computers, the Round Rock (Texas) group has transformed itself in recent years to the point of becoming today a major supplier of servers calibrated for AI.
Another good surprise was that of the sportswear brand Lululemon, with a better than expected net profit and increased margins (+0.18%).
In terms of the rating, in addition to Nvidia (+1.51%), which rebounded, and Marvell, the stars of semiconductors had the wind in their sails, whether it was Broadcom (+3.75%), AMD (+2.11%) or Qualcomm (+3.43%).
Intel did even better (+9.49%), boosted by information from the Bloomberg agency according to which the Santa Clara group is considering the split of its microprocessor design activities and its manufacturing operations.
After falling heavily at the beginning of August following a brutal movement of the yen, the New York market negotiated the end of August well and cut its losses.
While September is traditionally a bad month for stocks, the momentum could still continue, according to Patrick O’Hare.
“Right now, the market is taking it one session at a time and seeing that the economy is continuing to grow, that corporate earnings are holding up and that rates are going to go down,” he says.
S&P/TSX closes higher
Canada’s main stock index closed higher on Friday, helped by strength in the financial and technology sectors, which offset weakness in the energy sector.
The S&P/TSX composite index rose 118.69 points to 23,346.18.
The Canadian dollar was trading at 74.12 US cents compared to 74.22 US cents on Thursday.
Crude oil fell $2.36 to $73.55 a barrel and natural gas fell one cent to $2.15 per million BTU.
Gold lost $32.70 to $2,527.60 an ounce and copper fell one cent to $4.21 a pound.