Stocks rise to close out strong first half on encouraging inflation data: Live updates – CNBC

Technology stocks surged on Friday, lifting the Nasdaq Composite by 1.4% during early morning trading as the tech-heavy index barreled toward its best first half since 1983.

Some of the biggest gainers included Nvidia, Netflix and Airbnb, last up more than 3% each. Apple rose more than 1% to hit a $3 trillion market cap on a price target increase from Citi. Other big technology stocks, including Amazon, Alphabet, Microsoft and Meta Platforms each rose about 2%.

Outside of the tech giants, semiconductor and software stocks moved higher, with Atlassian, Datadog and Zscaler gaining about 3% each. Advanced Micro Devices and Marvell Technology added 2%.

The jump in technology stocks boosted the S&P 500 information technology sector by 1.8%. The communication services and consumer discretionary sectors added 1.4% and 1.5%, respectively.

— Samantha Subin

Apple rose more than 1%, bringing its market value to more than $3 trillion. The stock has been on fire this year, rallying more than 48%. On Thursday, Citi slapped a Street high price target of $240 per share.

May personal consumption expenditure data showed inflation is “stubborn but we’re making progress,” according to Gina Bolvin, president of Bolvin Wealth Management.

Bolvin also pointed to strong homebuilding data, which she said should signal downward pressure coming to rents in the coming months. And lower rents could, in turn, help bring inflation closer to the Federal Reserve’s 2% target.

“While it will take some time to get to the Fed’s two percent target, we’re making progress,” Bolvin said.

“Resilience will continue to trump recession,” she added. “While we may see a healthy correction, this bull market will continue.”

— Alex Harring

Analysts remain bullish on Nike’s direct-to-consumer strategy and brand momentum, even after the sports apparel giant’s disappointing earnings results.

Nike shares slid 3% in the premarket after the sports apparel giant missed earnings expectations for the first time in three years because of lower margins. However, Nike did exceed revenue forecasts.

Goldman Sachs’ Kate McShane maintained her buy rating on the stock, and actually raised her 12-month price target, saying she walked away from the results with her “constructive view intact.” Her $145 price target implies 27% upside from Thursday’s close.

“While near-term growth and margins are more challenged than our expectations on wholesale shipment timing / liquidation sales / transitory cost headwinds / SG&A investments, we believe this quarter continued to deliver several key proofpoints of the bull case,” McShane wrote Thursday.

The latest inflation data showed prices cool in May, according to a Commerce Department report released Friday.

The personal consumption expenditures price index increased 0.3% for the month when excluding food and energy, in line with the Dow Jones estimate. That’s also below the 0.4% increase see in April.

On a year over year basis, the closely watched number by the Federal Reserve increased 4.6% from a year ago, below the 4.7% expected by economists.

When including the volatile food and energy components, inflation was considerably softer — up just 0.1% on the month and 3.8% from a year ago. Those were down respectively from the 0.4% and 4.3% increases reported for April.

— Jeff Cox, Samantha Subin

Jefferies analyst David Katz upgraded this cruise line company to buy from hold, saying it’s benefiting from a number of changes that improves its outlook.

“The leadership change and the supply and demand recovery, and the resulting capital pivot, drive a significant shift from debt to equity value within the EV and should position the shares as more broadly investable, which could progress over several years,” Katz wrote on Friday.

— Sarah Min

Bank of America analyst Julien Dumoulin-Smith hiked his price target on this solar stock, and reiterated a buy rating, saying it’s in a “healthy” position after its recent selloff. In fact, it can surge more than 50%.

“The Street expects a roughly flat 2023 for US resi, which is consistent with communications from SEDG mgmt., but coming out of Intersolar Munich (renewable industry conference), investors are weary of the European growth story, following the collapse in polysilicon prices,” Dumoulin-Smith wrote on Friday.

“We argue these concerns seem misplaced, and point to EBITDA acceleration in 2H23, driven by compounding operating leverage and further C&I and storage deployments,” Dumoulin-Smith added.

— Sarah Min

Apple shares rose 0.8% before the bell, putting the iPhone maker on track to open above a $3 trillion market cap.

The move came after Citi hiked its price target to a new Street-high of $240 on Thursday, suggesting shares could rally another 27%, building on a roughly 46% gain so far this year.

“The Street is underestimating continued gross margin expansion,” wrote analyst Atif Malik, who assumed coverage of technology company.

— Samantha Subin

U.S. Treasury yields climbed on Friday as investors braced themselves for the release of the latest personal consumption expenditure price index, which is the Fed’s preferred inflation gauge. It could therefore impact the central bank’s next interest policy moves.

At 4 a.m. ET, the 10-year Treasury yield was up by over three basis points to 3.8858%. The 2-year Treasury yield was also last trading more than four basis points higher at 4.9268%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

— Sophie Kiderlin

European equity markets opened in slightly positive territory Friday, after making marginal gains throughout the week, with investors keeping an eye on upcoming euro zone inflation data.

The pan-European Stoxx 600 index was up 0.3% as trading started, with most sectors tentatively in positive territory. Mining stocks and oil and gas led gains, each with a 0.8% uptick, while tech stocks dropped 0.7%.

— Hannah Ward-Glenton

Large Asia-Pacific banks with $300 billion in assets or more hold strong capital buffers amid a slowing global economy, S&P Global Market Intelligence said.

China Merchants Bank, Oversea-Chinese Banking Corp., DBS Group Holdings, HSBC and KB Financial Group were among the banks with common equity tier 1 ratios above regulatory requirement levels for the past three fiscal years.

The CET1 ratio compares a bank’s capital against its assets, covering liquid bank holdings such as cash and stock.

The Basel III accord stipulates the minimum total capital ratio that a bank must maintain is 8% of its risk-weighted assets, with a minimum tier 1 capital ratio of 6%. It is set by the Basel Committee on Banking Supervision, a consortium of central banks from 28 countries.

— Jihye Lee

China’s factory activity data stayed in contraction territory for the month of June, according to the National Bureau of Statistics’ latest purchasing managers’ index reading.

The NBS manufacturing PMI came in at 49, below the 50-mark that separates contraction and growth for the third consecutive month.

The PMI reading in May stood at 48.8, the lowest since December. The Chinese yuan weakened to 7.26 against the U.S. dollar.

The International Monetary Fund and Pakistan have reached a staff-level agreement on a $3 billion loan, averting the risk of sovereign default.

The new financing engagement, referred to as a Stand by Arrangement (SBA), provides short-term financial assistance to countries facing balance of payments problems.

The agreement is subject to approval by the IMF’s Executive Board, which is expected to consider the request by mid-July.

“The new SBA will support the authorities’ immediate efforts to stabilize the economy from recent external shocks, preserve macroeconomic stability and provide a framework for financing from multilateral and bilateral partners,” the IMF said in a release.

IMF Mission Chief Nathan Porter said Pakistan’s economy has “faced several external shocks such as the catastrophic floods in 2022 that impacted the lives of millions of Pakistanis and an international commodity price spike in the wake of Russia’s war in Ukraine.”

The latest agreement comes as the 2019 extended fund facility-supported program is slated to expire at the end of this month.

— Jihye Lee

The Federal Reserve’s favorite inflation gauge — the personal consumption expenditures price index — will be out on Friday morning.

Economists polled by Dow Jones are calling for core PCE, which excludes volatile energy and food prices, to have gained 0.3% on a monthly basis in May and to have added 4.7% year over year. In April, the gauge ticked higher by 0.4% from the prior month and gained 4.7% on an annualized basis.

St. Louis Fed President Jim Bullard has pointed to three reasons behind why the Federal Open Market Committee favors PCE over the consumer price index. First, PCE accounts for substitutions that people make as they substitute some goods and services for others. Second, the PCE has more comprehensive coverage of goods and services. Finally, historical PCE data can be revised.

-Darla Mercado

Nike reported mixed fiscal fourth-quarter earnings on Thursday, as lower margins weighed on profits. Shares slid more than 4% in extended trading.

The sneaker giant posted earnings of 66 cents per share for the quarter, compared to estimates of 67 cents per share, according to Refinitiv. Revenue of $12.83 billion topped analysts’ estimates of $12.59 billion.

Nike’s margins fell again this quarter, this time by 1.4 percentage points to 43.6%. The company attributed the drop to higher product input costs, elevated freight and logistics costs, an uptick in promotions and unfavorable currency exchange rates.

— Gabrielle Fonrouge, Tanaya Macheel

Stock futures were little changed to begin trading on Thursday evening.

Dow Jones Industrial Average futures inched lower by 30 points, or 0.09%. S&P 500 futures ticked lower by 0.03% and Nasdaq 100 futures were just above the flat line.

In regular trading the Dow and S&P finished higher, while the Nasdaq Composite closed flat. All three of the major averages are on pace for a positive week and a winning month.

— Tanaya Macheel