Stocks were higher in midday trading Friday after a closely followed inflation report showed that price pressures eased last month, as the market looks to wrap up the month on a high note after a volatile stretch.
The Dow Jones Industrial Average was up 0.5%, recently, while the S&P 500 and the tech-heavy Nasdaq each added 0.4%. The major indexes closed sharply lower on Thursday as a sell-off in shares of Nvidia (NVDA) following the release of the AI chipmaker’s earnings report sent technology stocks reeling.
The U.S. stock market has stumbled over the past week amid mounting concerns about the health of the economy and uncertainty about the impact of policies being pursued by the Trump White House. Just over a week ago the S&P 500 hit all-time highs, while the Dow and Nasdaq were near records of their own. Heading into the last trading day of the month, the Nasdaq was down 5.5% in February, while the S&P 500 and Dow were each off about 3%.
Investors breathed a sigh of relief this morning after the Federal Reserve’s preferred measure of inflation came in exactly as economists had predicted. The numbers showed that inflation cooled in January for the first time in four months, which could alleviate concerns that the Fed won’t be in a position to cut interest rates this year. However, Trump’s plans to impose tariffs, which economist say could spark inflation in the future, remain a wild card.
Nvidia shares were on the rebound today, rising about 1%, after plunging more than 8% yesterday. Among other large-cap tech stocks, shares of EV maker Tesla (TSLA), which have lost more than a quarter of their value so far this year, gained 2%. Amazon (AMZN), Alphabet (GOOG), Meta Platforms (META) and Broadcom (AVGO) were also gaining ground, while Apple (AAPL) and Microsoft (MSFT) fell slightly.
Shares of Dell (DELL) were down about 6% despite a better-than-expected earnings report from the PC and server maker, while HP (HPQ) dropped 7% after issuing a disappointing outlook.
Bitcoin was at $84,000 in recent trading, after falling as low as $78,200 overnight, its lowest level since just after the U.S. presidential election in November. The cryptocurrency, which hit a record high of around $109,000 last month, has given back nearly all of the gains that were sparked, in part, by optimism that a crypto-friendly Trump administration would support policies that benefit the asset class.
The yield on the 10-year Treasury, which is correlated with expectations about where interest rates are headed and affects borrowing costs on all sorts of loans, was at 4.24%, down from 4.29% at yesterday’s close.
Gold futures were down 1.2% at $2,860 an ounce, while West Texas Intermediate crude oil futures fell 0.9% to $69.70.
Elastic Shares Jump on Strong Earnings
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Elastic (ESTC) shares jumped Friday after the data analytics software provider reported better-than-expected earnings on strong demand for products related to artificial intelligence.
The company posted adjusted earnings per share (EPS) of 63 cents for the fiscal third quarter, above analysts’ estimates compiled by Visible Alpha. Revenue was up about 17% year-over-year to $382.1 million, also ahead of expectations.
Elastic said the gains came as its total subscription customers grew about 3% to approximately 21,300. Customers with an annual contract value greater than $100,000 rose 15% to 1,460.
“Continued interest from customers building Generative AI applications and consolidating onto a single platform helped drive our outperformance during the quarter,” CEO Ash Kulkarni said in a release.
The company projected current-quarter EPS of 36 cents to 37 cents and revenue of $379 million to $381 million, above the analyst consensus. Its full-year outlook of $1.91 to $1.96 in EPS, and revenue of $1.474 billion to $1.476 billion also exceeded expectations.
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Shares of Elastic were up 13% in recent trading and have added about 16% since the start of the year.
Bullish Signs in Earnings Reports
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As of Thursday, the S&P 500 reported growth in earnings of almost 18%—the highest since the fourth quarter of 2021, according to FactSet. According to the data provider, 77% of the companies had beaten Wall Street’s earnings per share (EPS) estimates, in line with the five-year average.
Financial institutions were the best performing sector in the benchmark, chalking up 55% growth in earnings during this season, FactSet said in an infographic published Thursday.
Still, tariffs, the key subject weighing on markets apart from Nvidia’s failure to surpass an already high earnings bar, were a big corporate issue. The term “tariffs” was mentioned in earnings calls at least once by the 221 companies that reported between December 15 through February 21, FactSet said.
U.S. President Donald Trump said Thursday that tariffs on Mexico and Canada would go into effect on March 4, and that additional tariffs would be imposed on China. Economists have expressed concern that steep new tariffs could push up prices on consumer products, reigniting inflation while weighing on economic growth.
And another downbeat conclusion from its research: FactSet found 72 companies issued negative EPS guidance, exceeding the five-year average of 56.
Several consumer focused companies’ reports are due next week, among them Costco Wholesale (COST), Best Buy (BBY) and Target (TGT).
Broadcom Price Levels to Watch as Chipmaker Slumps
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Broadcom (AVGO) shares lost ground in early trading Friday after falling 7% yesterday amid a broader chip stock selloff as investors digested earnings from Nvidiavand President Trump’s latest announcement on tariffs.
Broadcom shares have lost about 15% of their value since the start of the year through Thursday’s close, but have gained more than 50% over the past 12 months as demand for its chips to support AI surged, with Bernstein analysts suggesting in December that the chipmaker could be having its “Nvidia moment.”
Since setting a new all-time high in mid-December, Broadcom shares have consolidated within a descending channel. More recently, selling from the pattern’s top trendline has accelerated, with the price falling below the respected 50-day moving average on increasing trading volume.
While the relative strength index (RSI) confirms bearish momentum with a reading below 40, the indicator sits at a level that often coincides with local bottoms in the stock.
Investors should watch major support levels on Broadcom’s chart around $185, $160, and $140, while also monitoring key overhead areas near $230 and $295.
The stock was down 0.3% at $197 in recent trading,
Read the full technical analysis piece here.
Nasdaq on Pace for Worst Month Since September 2023
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The Dow, S&P 500 and Nasdaq Composite enter the final day of February on track to post big losses for the month. Just over a week ago, the S&P 500 was hitting all-time highs, while the Dow and Nasdaq Composite weren’t far away from records of their own.
The Nasdaq Composite, which came into February on a three-month winning streak, is down 5.5% this month. If that holds, it would be the worst month for the tech-heavy index since a 5.8% decline in September 2023.
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The S&P 500 is down 3% in February, its worst performance since last April. The Dow’s 2.9% decline so far this month, while noteworthy, pales in comparison to its 5.3% decline in December. The Dow and S&P 500 both rose in January after losing ground in the final month of 2023.
Major Index Futures
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Futures tied to the Dow Jones Industrial Average were up 0.4%.
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S&P 500 futures rose 0.2%.
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Nasdaq 100 futures were flat.
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