Stock Market Today: S&P 500 Nabs New Record Close After February CPI

Jhon

4 months ago

Stocks fell in early trading Tuesday as investors mulled the Consumer Price Index (CPI) for February report. However, a big rally in several mega-cap tech names helped the major indices find their footing.

Before the opening, the Bureau of Labor Statistics said headline CPI rose 0.4% from January to February and up 3.2% year over year. Both figures were higher than the previous month and the annual increase was larger than economists expected.

Core CPI, which excludes volatile food and energy Prices rose 0.4% month over month and 3.8% year over year, both slightly above economists' forecasts.

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"Although inflation has continued to decline, much of core inflation remains "sticky" and is not slowing at a pace that will give the Fed the confidence it needs to begin the easing cycle perhaps even in June," he says. Quincy Krosbychief global strategist at LPL Financial.

While today's data indicates that "the last leg to 2% has gotten a little bit longer," Krosby adds, it also gives hope that the Federal Reserve should feel comfortable enough to start cutting rates in June. or July.

Fed Chair Jerome Powell will likely reiterate the central bank's "data-dependent" approach to Interest rates in it next Fed meetingwhich starts a week from today. financial world They will be interested in clues about the Federal Reserve's rate cut plans.

According to the CME Group FedWatch Tool, futures traders are currently pricing in a 32% chance that the Federal Reserve will issue its first quarter-point rate cut in June. Expectations that it will arrive in July are 44%, compared to 40% a day ago.

Oracle stands out for strong cloud growth

In individual stock news, Oracle (ORCL) rose 11.8% after the software company reported better-than-expected fiscal third-quarter earnings of $1.41 per share on online revenue of $13.3 billion. Revenue in the company's cloud services and licensing support segment, which houses its artificial intelligence (AI) servers, increased 12% year over year.

analyst William Blair Sebastian Nazi updated the tech stocks to Outperform (Buy) after earnings, citing strong demand for the company's cloud offerings, including Oracle Cloud Infrastructure, and a "huge tailwind" from generative AI that is still in its early stages.

"In our view, positive demand feedback and strong booking growth support the structural turnaround at Oracle that positions the company well for sustained acceleration in revenue growth," Naji says.

Nvidia gains $154 billion in market value after Oracle earnings

NVIDIA (NVDA) was another notable winner on Tuesday, with the Magnificent 7 actions increasing by 7.2%, adding 154 billion dollars in Market cover by the way. The chipmaker appears to have received a boost thanks to Oracle's earnings report.

On the company's earnings conference call, Larry Ellison, Oracle's chief technology officer, said it signed a large cloud infrastructure deal with Nvidia in its fiscal third quarter. "Oracle's second-generation AI infrastructure business is booming," Ellison said. "That's become pretty clear to everyone."

Additionally, Oracle CEO Safra Catz hinted that "some very interesting joint announcements with Nvidia" will be released next week.

Still, market participants may have been buying the dip in one of Wall Street's hottest stocks, considering NVDA stock suffered a two-day loss of 6.1% before today's trading.

Regarding the main indices, the Nasdaq Compound rose 1.5% to 16,265, the S&P 500 rose 1.1% to 5,175, and the Dow Jones Industrial Average gained 0.6% to 39,005.