Tech Stocks Ease On Hot PPI, Yields Rise, Microsoft, Amazon Snap 5-Week Positive Streak: What’s Driving Markets Friday?

Wall Street paused for a breather Friday following a stronger-than-anticipated producer inflation report that once again caught investors off guard, echoing the heat of a similarly strong consumer inflation report earlier in the week.

The Producer Price Index (PPI) for January 2024 saw a 0.3% month-over-month increase, surpassing the projected 0.1% surge, while the Consumer Price Index (CPI) surged by 3.1% year-on-year, exceeding the forecasted 2.9%, highlighting the ongoing intensity of the inflation battle.

“The January inflation data vindicates the Fed’s wait-and-see approach,” Bank of America economist Stephen Juneau said in a note.

As a result, traders trimmed their expectations for Fed rate cuts, delaying the anticipated start to this summer. Yields surged higher, with the policy-sensitive two-year note yield climbing by over 10 basis points to reach 4.67%.

As of noon trading in New York, the S&P 500 showed minimal change for the day, while the tech-heavy Nasdaq 100 lagged behind, potentially ending a five-week winning streak. A similar trend was observed with both Microsoft Corp. MSFT and Amazon.com Inc. AMZN

Friday’s Performance In Major Indices, ETFs

The SPDR S&P 500 ETF Trust SPY was 0.2% lower to $500.96, the SPDR Dow Jones Industrial Average DIA fell 0.3% to $386.90 and the tech-heavy Invesco QQQ Trust QQQ fell 0.5% to $432.16, according to Benzinga Pro data.

The Consumer Staples Select Sector SPDR Fund XLP, outperformed, up 0.5%, while the Communication Services Select Sector SPDR Fund XLC was the laggard, down 1.4%.

Friday’s Stock Movers

• Bio-Rad Laboratories Inc. BIO rose over 7%, marking the largest one-day rise among S&P 500 stocks after the company released stronger-than-expected results last quarter.
• Digital Realty Corp. Inc. DLR fell 7.6% after fourth-quarter results missed projections.
• Other companies reacting to earnings were Applied Materials Inc. AMAT, up 7%, Vulcan Materials Company VMC, Kinsale Capital Group Inc. KNSL, up 18%, The Trade Desk Inc. TTD, up 18%, Coinbase Global Inc. COIN, up 15%, Toast Inc. TOST, up 15%, ShockWave Medical Inc. SWAV, up 13%, Roku Inc. ROKU, down 23%, Dropbox Inc. DBX, down 21% and DoorDash Inc. DASH, down 9%.

Read now: Roku Stock Down 22% Despite ‘Almost Perfect Quarter’: Analyst Expects Stock To Be ‘Range-Bound Until Platform Growth Returns’

Illustration created using artificial intelligence via MidJourney.