Wall Street gained ground Friday, marking the end of an rocky week in which economic data and corporate earnings guidance hinted at softening demand but also economic resiliency ahead of next week's Federal Reserve monetary policy meeting.
The S&P and the Nasdaq ended green, while the Dow closed essentially unchanged.
From last Friday's close, the S&P and the Dow posted their third weekly gains in four, while the tech-laden Nasdaq notched its fourth straight weekly advance.
"It's a nice end to another solid week of what's shaping up to be a historically strong month," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "It's a realization that inflation continues to come down quickly and that is alleviating a lot of worries regarding the economy."
The Commerce Department's hotly anticipated personal consumption expenditures (PCE) report arrived largely in line with consensus, showing softening demand and cooling inflation - which is exactly what the Federal Reserve's restrictive interest rate hikes are intended to accomplish.
"(The PCE report) is another building block to the inflation data we’ve been seeing recently," Detrick added. "Supply chains continue to open up and improve, opening the door for the Fed to end its aggressive rate hiking cycle."
Fed Chair Jerome Powell has clearly stated that the central bank's battle against decades-high inflation is far from over, however. Financial markets still believe the central bank will hike the Fed funds target rate by another 25 basis points at the conclusion of next week's policy meeting.
Fourth-quarter earnings season is running on all cylinders, with 143 of the companies in the S&P 500 having reported. Of those, 67.8% have beaten Street expectations, slightly better than the 66% long-term average, but well below the 76% beat rate over the past four quarters, according to Refinitiv.
Analysts now see aggregate S&P 500 earnings falling 2.9% year-on-year, compared with the milder 1.6% annual drop seen on Jan. 1, per Refinitiv.
According to preliminary data, the S&P 500 gained 9.86 points, or 0.24%, to end at 4,070.29 points, while the Nasdaq Composite gained 109.30 points, or 0.95%, to 11,621.71. The Dow Jones Industrial Average rose 25.18 points, or 0.07%, to 33,974.59.
Shares of Intel Corp. plunged after the chipmaker provided dismal earnings projections.
Chevron Corp. posted record 2022 profit, but its fourth quarter earnings fell short of expectations, dragging the stock lower.
Rival payment companies American Express Co. and Visa Inc. both reported consensus-beating results, boosting their shares higher.
Next week, in addition to the Fed meeting and January employment data, a string of high profile earnings reports are on tap, notably from Apple Inc, Amazon.com, Alphabet Inc and Meta Platforms, among others.
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