Friday's trading saw a cautious start but gradually, stocks began to rise modestly. All the major averages, including the Dow and the S&P 500, recorded new record intraday highs.
At one point in the trading session, the Dow climbed by 144.41 points reaching a 0.4 percent increase at 38,193.54. The Nasdaq also increased by 20.97 points to reach a 0.1 percent high at 15,531.47. The S&P 500 experienced an 11.84 points rise, a more modest increase of 0.2 percent to reach 4,906.00.
This slight resilience exhibited by Wall Street follows the release of the Commerce Department's report, which indicated a greater than forecasted slowdown in the annual rate of core consumer price growth for December.
According to the Commerce Department, December's consumer prices saw a 2.6 percent rise compared to the same period the previous year. Unchanging from November's trends, it met economists' predictions.
In addition, the report highlighted the slowed annual growth rate of core consumer prices, excluding food and energy costs, to 2.9 percent in December from 3.2 percent in November. This was slower than the anticipated deceleration to 3.0 percent.
The Federal Reserve prefers annual inflation readings, which were included in the monthly Commerce Department's report on personal income and spending.
Larry Tentarelli, Chief Technical Strategist from the Blue Chip Daily Trend Report, said, "Today's inflation report gives the Fed a path to cut interest rates. Given the recent strong GDP data and jobs data, we foresee the first rate cut to be around May-June."
He inferred, "If jobs and/or economic data softens slightly and inflation continues to decrease quickly, the odds of a rate cut in March could be higher, but that is not our base case at the moment.”
However, Intel's (INTC) sharp share drop limited the market's gains, plunging by 10.7 percent. The semiconductor giant is facing pressure after announcing better than expected results for the fourth quarter but providing a disappointing outlook for the first quarter.
In contrast, American Express (AXP) shares rose by 8.5 percent following the financial services company's fourth quarter results, which missed expectations but projected promising results for 2024.
In terms of sector news, telecom stocks showed the most gains with the NYSE Arca North American Telecom Index rising by 1.6 percent. Oil service stocks also experienced some growth due to a slight increase in crude oil prices, as indicated by the Philadelphia Oil Service Index's 1.1 percent increase.
On the downside, airline stocks felt the pressure, causing the NYSE Arca Airline Index to decrease by 1.6 percent. Semiconductor stocks also fell significantly due to Intel's sharp drop, resulting in a 1.6 percent decrease by the Philadelphia Semiconductor Index.
Regarding other markets, Asia-Pacific region markets had a mixed performance on Friday. Japan's Nikkei 225 Index fell by 1.3 percent while China's Shanghai Composite Index rose by 0.1 percent and South Korea's Kospi Index increased by 0.3 percent.
European markets all recorded an increase for the day. The French CAC 40 Index saw a significant increase of 2.2 percent, followed by the U.K.'s FTSE 100 Index, which went up by 1.5 percent and the German DAX Index, which rose by 0.1 percent.
In the bond market, treasuries experienced a modest drop after some early volatility. This caused the yield on the benchmark ten-year note, which operates inversely to its price, to rise by 1.9 basis points to reach 4.151 percent.
