Abigail Somerville
NEW YORK (Reuters) – The S&P 500 and Nasdaq indexes fell to start the week on Friday, snapping a five-week winning streak, as investors digested an inflation report and waited to determine when the Federal Reserve would start cutting interest rates.
The Dow Jones Industrial Average rose that day.
The technology sector was lower, with the semiconductor index dropping and Dell shares tumbling after the company forecast current-quarter profit to fall short of market expectations and suggested rising manufacturing costs for servers that handle AI-intensive workloads would eat into its full-year profit margins.
The Commerce Department’s Bureau of Economic Analysis said the U.S. personal consumption expenditures (PCE) price index rose 0.3% last month, in line with the unrevised rate of increase in March.
The company added that consumer spending slowed more than expected.
“People are happy that this wasn’t a huge surprise, but underneath the surface, consumers continue to be a little nervous,” said Carol Schleif, chief investment officer at BMO Family Office in Minneapolis.
“You can see that when you look at the sectoral performance of the market. … The consumer discretionary sector is at the bottom of the list of sectoral performance today.”
Futures traders tracking the Fed’s benchmark interest rate have strengthened their view that there is a roughly even chance that the central bank will begin cutting rates in September, and have also raised the chance of a second rate cut in December to roughly the same.
In preliminary data, the S&P 500 rose 44.53 points, or 0.85%, to close at 5,280.01, while the Nasdaq Composite Index fell 2.06 points, or 0.01%, to 16,735.02. The Dow Jones Industrial Average rose 595.78 points, or 1.56%, to 38,707.26.
Technology and semiconductor stocks, which have driven Wall Street’s recent gains, have fallen this week as a surge in Treasury yields has weighed on riskier assets.
Among gainers, security solutions provider Zscaler surged after reporting better-than-expected fourth-quarter earnings.
Gap Inc. shares surged after the company raised its full-year sales outlook and reported first-quarter results that beat expectations, another sign that its turnaround strategy is starting to work.
Shares of Trump Media & Technology Group fell after a New York jury found former President Donald Trump guilty of falsifying documents to cover up making hush payments to porn actresses before the 2016 election.
(This story has been corrected in the third paragraph to remove statement that technology fell and consumer discretionary fell.)
(Reporting by Abigail Somerville in New York, Johan M. Cherian and Lisa Pauline Matakkal in Bengaluru; Additional reporting by Pranav Kashyap; Editing by Pooja Desai and Richard Chang)
