(Image credit: Jakub Porzycki/NurPhoto via Getty Images)
Stocks opened lower Thursday as market participants took in the latest inflation update, but quickly turned higher on reports of an extended ceasefire between the U.S. and Iran. A continued rally in tech stocks also kept the bulls in charge, with the three main indexes ending the day at new highs.
Ahead of the open, the Bureau of Economic Analysis (BEA) said the Personal Consumption Expenditures Price Index (PCE) rose 0.4% from March to April and was 3.8% higher compared to the year prior.
Core PCE, which excludes volatile food and energy prices, was up 0.2% month over month and 3.3% year over year.
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The monthly readings came in below economists’ expectations, though the annual increases remain well above the Federal Reserve’s inflation target of 2%.
“Inflation pressures continue,” says Adam Hetts, global head of Multi-Asset and portfolio manager at Janus Henderson Investors. “As year-on-year headline and core measures continue to read well into the 3% range, above the Fed’s comfort zone, a critical factor in the forward path may well be the duration of elevated oil prices as the Middle East conflict continues.”
However, encouraging news on the geopolitical front briefly sent oil prices to their lowest level since mid-April today, though front-month West Texas Intermediate crude futures eventually settled slightly higher at $88.90 per barrel.
As for stocks, the tech-heavy Nasdaq Composite ended up 0.9% at 26,917, the broader S&P 500 rose 0.6% to 7,563, and the blue-chip Dow Jones Industrial Average gained 0.05% to 50,668 — new all-time closing highs.
Snowflake has its biggest one-day gain ever
The company cited artificial intelligence as a “powerful tailwind,” and said it has 779 customers spending more than $1 million on a trailing 12-month basis.
“SNOW’s new AI products — Cortex Code and Snowflake Intelligence — were key upside drivers,” says Mizuho Americas analyst Gregg Moskowitz. “We continue to believe that healthy consumption activity, along with secular trends driving enterprises to modernize their data estates, set up SNOW for sustained momentum.”
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Moskowitz believes Snowflake has “multiple emerging upside vectors — including several new products and an improving go-to-market” strategy that should accelerate growth for a company that has improving fundamentals and a reasonable valuation.
In separate announcements, Snowflake said it signed a $6 billion multi-year infrastructure commitment with Amazon Web Services and that it will acquire AI agents platform Natoma.
Dollar Tree has its best day in 4 years after earnings
DLTR also saw better-than-expected same-store sales growth of 3.5% and gave upbeat guidance.
The results sent the consumer staples stock up 17.9% — its best day since 2022 — but some on Wall Street are still worried.
“We believe that DLTR has been oversold recently, but remain on the sidelines over the medium to long term,” says Bernstein analyst Zhihan Ma, who has a Market Perform (Hold) rating on the retail stock. “Near term, the key metrics to watch include whether DLTR manages to return to positive traffic growth and how much freight cost headwinds vs. tariff refunds/further tariff uncertainties will impact margins.”
And Jefferies analyst Corey Tarlowe, who has an Underperform (Sell) rating on DLTR, says that while it was a good quarter, he remains “cautious about the traffic trend” and consumer demand due to higher gas prices.
