The benchmark S&P 500 and the blue-chips Dow were subdued on Friday as an in-line inflation print signaling continued moderation in price pressures helped offset an earnings gloom cast by a dour revenue forecast from Intel. The U.S. Commerce Department’s report showed the personal consumption expenditure index – the Federal Reserve’s preferred inflation gauge – rose moderately in December. Despite the muted performance of the stock market, investors took some solace in the inflation data that suggested a steady and controlled growth trajectory.
Intel’s revenue forecast contributed to the somber mood, with the tech giant expecting a year of slow growth due to intensifying competition and global economic uncertainties. The news dragged down the company’s shares, sending ripples across the technology sector.
Meanwhile, the personal consumption expenditure index, which measures household spending, experienced a moderate increase of 0.1% in December, matching economists’ expectations. This in-line inflation print indicated that price pressures remained in check, providing reassurance to the Federal Reserve as they navigate the delicate balance between stimulating economic growth and keeping inflation under control.
The Wall Street performance on Friday showed contrasting forces dictating the market sentiment. Inflation data suggesting a steady and controlled rise allowed investors to believe that the Federal Reserve would maintain their accommodative monetary policy. However, the dour outlook from Intel raised concerns about the health of the technology sector and its potential adverse impact on the broader economy.
Investors will be monitoring upcoming economic data and earnings reports for further insight into the state of the economy and corporate performance. The stock market remains in a state of flux as it navigates a multitude of uncertainties, including the trajectory of the Omicron variant, supply chain disruptions, and geopolitical tensions.
In summary, the S&P 500 and Dow were subdued on Friday as an in-line inflation print signaled continued moderation in price pressures, offsetting the gloomy revenue forecast from Intel. The personal consumption expenditure index remained steady, providing reassurance to the Federal Reserve as they manage the delicate balance between fostering economic growth and constraining inflation. The stock market continues to face a range of challenges that will shape its performance in the coming months.
