By US stocks moved higher on Thursday as markets welcomed a cooldown in geopolitical tensions, sparking a broad rally across sectors.
The Dow Jones Industrial Average rose 411 points, or 0.9%, while the S&P 500 gained 0.7%. The Nasdaq Composite led the way, climbing 1%.
But beneath the early cheerfulness lies a fragile confidence as traders are waiting for 10 AM ET when the December Personal Consumption Expenditures data hits.
The release could derail the current momentum if inflation proves stickier than expected ahead of next week’s Federal Reserve meeting.
The tech rebound in focus
Yesterday’s turnaround belonged to Intel.
The chipmaker rocketed 11% higher, hitting its best level since early 2022, as traders embraced President Trump’s walk-back on Greenland tariff threats.
AMD and other chip stocks followed suit, with the entire sector recapturing ground lost in Tuesday’s panic.
This morning, the Magnificent Seven tech giants, Tesla, Amazon, and their peers, are trading higher by 0.4 to 1 percent in pre-market action, suggesting the “risk-on” mood is holding.
But Intel faces its real test after the closing bell tonight as the company will report fourth-quarter earnings, and investors are watching closely for clues on artificial intelligence chip demand.
Abbott stumbles as earnings blitz begins
Not all corporate news is positive.
Abbott Laboratories reported earnings per share of $1.50 this morning, matching expectations on that front, but the healthcare company missed revenue estimates.
The weakness stems from a steep drop in COVID-19 testing and pricing pressure from China’s bulk-purchase programs.
Moreover, Abbott’s guidance for the current quarter came in below forecasts, sending shares down nearly 6% in pre-market trading.
The stumble signals that even “defensive” healthcare plays face headwinds, a cautionary tale as General Electric reports this morning and Intel releases results tonight.
The inflation data that could shake it all
The real deciding factor for Thursday’s direction arrives at 10 AM when the December Personal Consumption Expenditures price index lands.
Economists expect a 0.2% monthly increase and 2.8% annual reading, roughly in line with recent trends.
But a miss could reset rate-cut expectations significantly ahead of the Federal Reserve’s monetary policy meeting scheduled for January 27 and 28.
Markets are bracing for volatility as strategists say the data could swing the S&P 500 in either direction depending on the outcome.
Crude oil prices have eased this morning to around $59.90–$60.50 a barrel as geopolitical tensions cool, while gold ticked higher 1.4%, reflecting a modest shift away from flight-to-safety positioning.
The dollar index dropped to 98.68, further easing pressure on commodities priced in US currency.
The Russell 2000 small-cap index led yesterday’s gains with a 2% jump, suggesting investors are rotating out of defensive plays into beaten-down sectors.
If inflation data cooperate, that rotation could accelerate. If not, expect a swift reversal.
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