US Equity Indexes Surge Midday After Inflation Report

US equity indexes soared after midday on Friday, lifted by a moderation in inflation and strong quarterly earnings.

The Nasdaq rose 1.1% to 17,378.1, with the S&P 500 up 1.3% to 5,468.2 and the Dow Jones Industrial Average 1.8% higher at 40,657.3. All sectors were up intraday, with industrials, financials and materials among the top gainers.

The growth in the annual headline personal consumption expenditures price index eased to 2.5% in June from 2.6% in May, but was above Wall Street's 2.4% forecast. The Fed's preferred core measure, which excludes food and energy, was unchanged at 2.6%, compared with the 2.5% consensus. Sequentially, inflation grew 0.1% last month from a flat reading in May, while the core measure climbed 0.2% from 0.1%. Both metrics were in line with expectations.

Most Treasury yields declined, with the 10-year down five basis points to 4.20%, and the two-year rate retreating 5.4 basis points to 4.39%.

In company news, 3M (MMM) lifted the lower end of its full-year adjusted earnings outlook after reporting Q2 results above market estimates. Shares soared 19% intraday, the top performer on the S&P 500 and the Dow.

BofA Securities upgraded Mohawk Industries (MHK) to buy from underperform, while adjusting its price target to $177 from $120. The company reported Thursday a surprise increase in Q2 earnings, and its guidance for Q3 was above analysts' projections. Shares surged 18% intraday, the second-highest return on the S&P 500.

DexCom (DXCM) shares sank 41% intraday, the steepest decline on the S&P 500 and the Nasdaq, after the company lowered its 2024 revenue guidance.

West Texas Intermediate crude oil slumped 1.4% to $77.21 a barrel.