- PCE: Inflation, consumer spending cooled in October
- Salesforce Rises on Earnings Guidance Increase
- Ford gives in on cost estimate for labor agreement
- Indices: Dow up 1.47%, S&P up 0.38%, Nasdaq down 0.23%
NEW YORK, Nov 30 (Portal) – The Dow Jones Industrial Average closed at its highest level since January 2022 as investors crossed the finish line of a record month for stocks and viewed cooling inflation data as a harbinger of easing monetary policy from the Federal Reserve.
The Dow (.DJI) was the clear outperformer, with a solid rebound from Salesforce (CRM.N) following its consensus-beating earnings report.
The S&P 500 (.SPX) closed slightly in the green, while tech and tech-related momentum stocks led by Nvidia (NVDA.O) dragged the Nasdaq into negative territory.
Still, the S&P 500 and Nasdaq (.IXIC) posted their largest monthly percentage gains since July 2022. November was the Dow’s best month for percentage gains since October 2022.
“We’re putting the cherry on top of a great month,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “It’s a nice reminder for investors of how worried everyone was a month ago, and we just wrapped up one of the best months in history for stocks.”
Among data released Thursday, the Commerce Department’s closely watched personal consumption expenditures (PCE) report showed inflation cooling as expected, as did consumer spending. The data reinforced expectations that the Fed has completed its rate hike cycle.
While New York Fed President John Williams reiterated the central bank’s determination to remain data-dependent, he would not rule out the possibility of further rate hikes if inflation does not moderate further.
“The catalyst for this month’s strength was the realization that inflation is quickly returning to bottom. We saw that again today as core PCE data suggests inflation is no longer a major headwind,” Detrick added.
Inflation meter
Financial markets have priced in a 95.8% chance that the central bank will keep its key interest rate at 5.25% to 5.50% at the December policy meeting.
“There probably won’t be any rate hikes any time soon, the next step will probably be a cut, probably in the middle of next year,” Detrick said. “The massive drop in (Treasury) yields this month is the bond market’s way of expressing its belief that the Fed is indeed done raising rates.”
The New York Stock Exchange (NYSE) in New York City, U.S., February 24, 2022. Portal/Caitlin Ochs/File Photo Acquire License Rights
Powell is scheduled to take part in two separate discussions on Friday at 11 a.m. ET and 2 p.m. ET.
The Dow Jones Industrial Average (.DJI) rose 520.47 points, or 1.47%, to 35,950.89, the S&P 500 (.SPX) rose 17.22 points, or 0.38%, to 4,567.8 and the Nasdaq Composite (.IXIC) fell 32.27 points, or 0.23%, to 14,226.22.
Among the S&P 500’s 11 major sectors, healthcare stocks (.SPXHC) performed better, while communications services (.SPLRCL) suffered the largest percentage decline.
Dow Transports (.DJT), considered a barometer of economic health, rose 1.4%.
Salesforce rose 9.4% after the company gave better-than-expected profit guidance on solid demand for its cloud services.
Ford Motor Co (FN) fell 3.1% after the automaker pegged the cost of a new labor deal at $8.8 billion and cut its full-year forecast.
Data cloud company Snowflake (SNOW.N) rose 7.1% after forecasting fourth-quarter product revenue above Street estimates.
Pinterest (PINS.N) and Snap Inc (SNAP.N) rose 2.4% and 6.5%, respectively, after Jefferies upgraded the social media companies to “buy” from “hold.”
On the NYSE, advancing issues outnumbered declining issues by a ratio of 1.62 to 1; On the Nasdaq, a ratio of 1.01 to 1 favored the decliners.
The S&P 500 recorded 37 new 52-week highs and two new lows; The Nasdaq Composite posted 75 new highs and 109 new lows.
Volume on U.S. exchanges was 13.22 billion shares, compared with the full-session average of 10.55 billion over the last 20 trading days.
Reporting by Stephen Culp; Additional reporting by Shristi Achar A and Amruta Khandekar in Bengaluru; Edited by Shinjini Ganguli and Richard Chang
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