Market Rally Expected as Apple’s Strong Sales Forecast Boosts Confidence
The US stock market is poised to open higher today, driven by Apple’s impressive sales forecast and steady inflation data. The tech giant’s shares surged 4.2% in premarket trading, indicating a potential recovery from a dip in iPhone sales as it rolls out AI features.
Inflation Remains Under Control
The personal consumption expenditures price index (PCE) rose 0.3% in December, matching economists’ forecasts. The 12-month PCE inflation rate remained steady at 2.6%, also in line with expectations. Excluding volatile food and energy components, the PCE price index increased 0.2% last month, meeting estimates.
Fed’s Interest-Rate Path Unchanged
Traders maintained their bets on the Federal Reserve waiting until June to resume rate cuts, with futures indicating a 70% probability. The central bank held interest rates steady in its latest rate decision, citing a need for further improvement in inflation and jobs data.
Mixed Bag for Corporate Earnings
Chevron fell 1.2% after reporting below-estimate earnings, while Exxon Mobil rose 1% after beating profit estimates. Atlassian jumped 19.8% after projecting third-quarter revenue above estimates and raising its annual revenue forecasts.
Market Volatility Persists
Despite today’s gains, the S&P 500 and Nasdaq are set for weekly losses, driven by a rout in AI-linked stocks following a breakthrough in low-cost artificial-intelligence models by Chinese startup DeepSeek. Microsoft’s disappointing growth forecast in its cloud computing business exacerbated broader losses.
Global Markets on High Alert
President Donald Trump’s threat to impose a 25% tariff on imports from Mexico and Canada has kept global markets on edge. Meanwhile, the S&P 500 remains less than 1% short of its all-time high, hit last week.
Other Market Movers
Vertex Pharmaceuticals rose 2.3% after the FDA approved its non-opioid painkiller, while Deckers Outdoor dropped 14.9% after missing sales forecasts. Walgreens Boots Alliance lost 12% after suspending its quarterly cash dividend amid restructuring efforts.
Leave a Reply