Market Rally Continues as Apple’s Earnings Boost Investor Confidence
The US stock market experienced a significant upswing on Friday, driven by Apple’s impressive earnings report and the Federal Reserve’s inflation gauge meeting expectations. The tech-heavy Nasdaq Composite climbed 1.2%, while the S&P 500 and Dow Jones Industrial Average rose 0.5% and 0.3%, respectively.
Apple’s Earnings Beat Expectations
Apple’s shares surged over 2% in morning trading after the company posted a first-quarter profit beat. Despite falling short on iPhone and China sales, investors were optimistic about the company’s revenue outlook, signaling a potential future recovery. Apple’s approach to artificial intelligence (AI) has been rewarded, with the company’s shares rising during the market panic.
Tariff Deadline Looms, But Investors Remain Cautious
The looming tariff deadline has revived concerns about the impact on the economy from a clampdown on the US’s biggest trading partners. President Donald Trump has threatened to impose a 25% tariff on Canada and Mexico on February 1, sparking worries about the potential consequences.
Federal Reserve’s Inflation Gauge Meets Expectations
The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation gauge, rose 2.8% year-over-year in December, meeting economist estimates. The reading was higher than the 0.1% increase seen in November. The lack of clarity over tariffs has left Federal Reserve Chair Jerome Powell in wait-and-see mode, with the potential for tariffs to inflame inflation in focus.
Deckers Outdoor Shares Plummet
Shares of Deckers Outdoor, the company behind shoe brands UGG and HOKA, plummeted as much as 14% in pre-market trading after the company’s sales forecast for its fiscal year 2025 fell short of expectations. The stock had closed at a record high on Thursday ahead of the results.
Economic Calendar and Earnings
The economic calendar is packed with key events, including the core PCE index and employment cost index. Earnings reports from Charter Communications, Chevron, Colgate, Exxon Mobil, and Phillips 66 are also expected.
Other Market News
Novo Nordisk’s stock faces a tough climb after a 40% slump, while BofA’s Hartnett predicts Big Tech will become the “Lagnificent 7.” Tesla investors are doubting Elon Musk’s latest robotaxi promise, and Samsung has received Nvidia’s nod to supply less advanced AI memory.
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