S&P500 and Nasdaq: Tech Stocks Lift US Indices Despite Hot PCE Inflation Data
Communication Services led sector gains as Meta and Alphabet surged, while Technology followed closely with Nvidia and Microsoft hitting new all-time highs, reflecting continued enthusiasm for AI momentum. Nike jumped 15.2% after beating earnings expectations, signaling operational improvement under CEO Elliott Hill despite projected $1 billion in tariff-related costs. Nvidia added 1.8%, moving closer to a $4 trillion market cap, while Micron and EchoStar contributed to the semiconductor and tech-led rally.
Energy lagged with a 3.19% drop as WTI crude fell 12.1% to $65.08, while Real Estate slipped 0.64% under the weight of higher rate expectations. Growth stocks outpaced value, suggesting traders are leaning back into growth leadership as macro conditions evolve.
What Did the Federal Reserve’s Preferred Inflation Gauge Show?
The PCE inflation report showed a mixed picture for the Fed. Core PCE rose to 2.7% annually, above the 2.6% forecast, while personal spending and income both fell unexpectedly, pointing to potential economic softening. Traders maintained expectations for a September rate cut, with fed funds futures pricing in a 76% probability. Treasury yields ticked higher, with the 10-year at 4.29%, reflecting cautious recalibration of rate outlooks.
What Should Traders Watch Heading Into Earnings Season?
Markets enter the summer positioned for further gains, with the S&P 500 and Nasdaq posting strong weekly advances. However, the abrupt Canada trade fallout highlights risks that could affect sentiment. Traders will focus on the upcoming July 9 tariff deadline and second-quarter earnings as the next major catalysts, with the market’s ability to absorb shocks while maintaining new highs supporting a measured bullish bias in the weeks ahead.
More Information in our Economic Calendar.