U.S. Stocks Rise Amid Positive Earnings and Inflation Data

U.S. stocks climbed on Friday, buoyed by strong earnings from Apple and the Federal Reserve's preferred inflation gauge matching market expectations.

Tech Sector Boasts Solid Gains

The Nasdaq Composite (^IXIC), heavily weighted towards tech stocks, gained 1.3%, driven by robust tech earnings. The S&P 500 (^GSPC) advanced approximately 0.7%, while the Dow Jones Industrial Average (^DJI) rose 0.1%, both extending their gains from Thursday.

Apple Earnings Beat Estimates

Shares of Apple surged during afternoon trading after the tech giant reported a first-quarter profit beat. While quarterly iPhone and China sales underperformed, investors expressed optimism about revenue growth as a sign of future recovery. The Nasdaq is set for a modest weekly loss due to the tech rout sparked by DeepSeek, while the S&P 500 and the Dow remain on track for gains amidst a strong start to earnings season.

Trump's Tariff Deadline Looms

A turbulent January marked by President Donald Trump's early days in office appears poised to deliver monthly gains for major gauges, with the Dow eyeing a jump of over 5%. Trump on Thursday reaffirmed his threat to impose tariffs on Canada and Mexico on February 1. The impending deadline has revived concerns about the economic impact of a clampdown on the U.S.'s largest trading partners.

Gold Gains Amid Tariff Uncertainty

Gold futures reached new records on Friday as Goldman Sachs analysts reiterated their bullish call on the precious metal given the looming potential of U.S. tariffs against Mexico and Canada. The firm sees tariff escalations and U.S. debt fears as the major risks expected to drive gold prices higher.

Traders Bet on Delayed Rate Cut

The latest inflation reading did little to sway market sentiment on the Fed's interest rate approach. Traders maintained their bets that the next rate cut likely won't arrive until at least June. The latest reading of the Fed's preferred inflation gauge showed prices increased in line with expectations in December, keeping inflation above the Fed's 2% target.

Apple Focuses on Artificial Intelligence

Apple's approach to artificial intelligence (AI) was rewarded in recent days, as shares rose during the market panic triggered by DeepSeek's success. Apple's intuitive AI features are seen as encouraging users to upgrade their devices.

Fed's Inflation Gauge Matches Expectations

The latest reading of the Federal Reserve's preferred inflation gauge showed prices increased in line with expectations in December, with inflation remaining above the Fed's 2% target. The steady progress in inflation appeared to solidify the market's forecasting on rate cuts. The possibility of a rate cut at the Fed's June meeting stands at nearly 70%, according to the CME FedWatch tool.