Stocks Rise on Strong US Consumer Spending Data

Key Takeaways:

* US stocks rallied, driven by robust consumer spending and a solid economic outlook.
* Small-cap stocks outperformed amid optimism for a broadening market.
* Tech stocks faced headwinds, but 85% of S&P 500 companies gained.
* Investors await Apple's earnings results as concerns over AI valuations ease.

Market Performance:

* S&P 500: +0.5%
* Nasdaq 100: +0.3%
* Dow Jones Industrial Average: +0.6%
* Russell 2000: +1.5%

Economic Data:

* US consumer spending surged 4.2%, the strongest growth since late 2021.
* Labor market remains strong, with jobless claims falling unexpectedly.
* Federal Reserve maintains interest rates unchanged, indicating patience in its approach to inflation.

Corporate Highlights:

* Apple's earnings outlook faces optimism despite AI concerns.
* Southwest Airlines warns of higher costs due to labor expenses.
* United Parcel Service projects revenue below expectations.
* Microsoft's cloud business growth slows due to data center capacity constraints.
* Meta CEO Zuckerberg expresses confidence in AI strategy.
* IBM projects strong revenue growth and AI bookings.
* Caterpillar expects slightly lower revenues amid demand concerns.
* Mastercard reports strong earnings driven by diversification.
* Rogers Communications beats estimates with wireless revenue gains.
* Cigna reports higher costs from catastrophic medical coverage.

Outlook:

* Analysts see the bull market remaining intact with broader stock participation.
* Economic growth remains a key driver for US stocks.
* Investors await further data to gauge the Federal Reserve's monetary policy stance.