Wall Street Reacts to Inflation Data and Earnings Reports

This week, Wall Street’s focus shifted to inflation data, with investors analyzing lower-than-expected producer price index (PPI) and consumer price index (CPI) figures for December. The start of earnings season showed promise as several major banks reported positive results. Despite a rough beginning for technology stocks and a rise in the 10-year Treasury yield to its highest since November 2023, the Nasdaq Composite (IXIC) ended its five-day slump. Meanwhile, the Dow Jones Industrial Average (DJI) and S&P 500 Index (SPX) enjoyed their best days since November 6th, with the market aiming for solid weekly gains.

Tech Stocks in the Spotlight

The technology sector experienced a whirlwind of activity. While analysts adopted a bearish outlook on Pinterest (PINS), Nvidia (NVDA) maintained its appeal among investors, despite a sluggish start to the year. Companies like Sea (SE) and Dell Technologies (DELL) emerged as potential top stock picks for 2025. In a significant move, Microsoft (MSFT) introduced its Quantum Ready program for businesses, benefiting quantum computing stocks such as D-Wave Quantum (QBTS), IONQ (IONQ), and Rigetti Computing (RGTI).

Chip stocks such as ASML (ASML), Broadcom (AVGO), and Lam Research (LRCX) also experienced gains following Taiwan Semiconductor’s (TSM) record profits. Additionally, the shares of cloud companies Salesforce (CRM) and Cloudflare (NET) surged as analysts issued positive ratings.

Retail Sector Updates: A Mixed Bag

This week, various retailers provided updates on their performance. Abercrombie & Fitch (ANF), Lululemon Athletica (LULU), and Macy’s (M) saw their stock prices react in different ways. Notably, Signet Jewelers (SIG) faced a decline after lowering its fourth-quarter sales and earnings outlook, while Target (TGT) raised its comparable store sales projections.

In other news, Ollie’s Bargain Outlet (OOLI) appears set for a recovery, and e-commerce titan Amazon.com (AMZN) aims to reach its prior record highs once more.

Upcoming Earnings from Major Corporations

As markets observe Martin Luther King, Jr. Day on Monday, traders will soon be tasked with analyzing purchasing managers’ index (PMI) data upon their return. Following this, a plethora of earnings releases from blue chip companies will be available, including 3M (MMM), American Express (AXP), Johnson & Johnson (JNJ), Procter & Gamble (PG), Travelers (TRV), and Verizon Communications (VZ). It’s crucial to consider which stocks might outperform during this holiday-shortened week and to approach the associated SPX risks with caution.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.