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Apple's $3 Trillion Milestone Ignites Wall Street Rally Amid Subsiding Inflation Fears

Wall Street witnessed a buoyant rally on Friday, bolstered by Apple's record-breaking market capitalization and hints of alleviating inflation.

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Apple logo

Apple Surges, Tech Giants Follow Suit

Friday was a momentous day for Apple Inc. (NASDAQ: AAPL), as the tech behemoth touched a historic $3 trillion market value for the first time since January last year. The company's shares escalated 1.5% to an unprecedented high of $192.40, powered by burgeoning optimism surrounding the potential of artificial intelligence and the firm's consistent revenue growth.

Following Apple's trail, other technology giants, including Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA), witnessed an uptick ranging between 1.2% and 3.3%. This surge continues the dazzling rally witnessed this year, fueled by robust earnings and the buzzing AI domain.

Bigger Companies Flourish Amid Favorable Macro Conditions

David Russell, the Vice President of Market Intelligence at TradeStation, commented on the current market trends. He observed, "The largest companies are thriving right now, as the macroeconomic conditions are favoring them." Russell's comments come on the back of the comforting Personal Consumption Expenditure (PCE) numbers. These figures seem to indicate that the worst phase of the inflation crisis may be behind us.

Inflation Update: Easing Signs Comfort Investors

The PCE index, the Federal Reserve's chosen inflation gauge, increased by 3.8% as reported by the Commerce Department. This rise contrasts with a 4.3% surge in April. Once volatile food and energy components are excluded, the PCE price index saw a modest rise of 0.3%, down from the 0.4% increase observed in the preceding month.

Market Performance Amid Fed Rate Hike Speculations

Following these data, the possibility of a Fed rate hike in the July meeting adjusted slightly. Traders were pricing in an 86.8% chance for a 25 basis points hike to a range of 5.25%-5.50%, according to CMEGroup's Fedwatch tool, down from 89.3% on Thursday.

Mid-day market data showcased the Dow Jones Industrial Average, S&P 500, and the Nasdaq Composite all on an upward trajectory, increasing by 0.64%, 1.01%, and 1.29% respectively. Despite hawkish statements from Fed Chair Jerome Powell and convincing economic data indicating continuous rate hikes, the stock markets appeared to take solace in the robust signs of strength in the U.S. economy.


Record-Breaking Performances and Market Sentiments

Optimism around first-quarter earnings and positive economic sentiments set the stage for a strong second quarter. The Nasdaq index saw its best first-half performance in four decades, recording a staggering 31.5% gain. Furthermore, the Nasdaq 100 index, encompassing leading tech stocks, tracked its best-ever first-half performance with a 38.5% rise.

Simultaneously, Wall Street's fear barometer, the CBOE Market Volatility Index, slid to a one-week low, indicating a decrease in market anxiety.

Noteworthy Single Stock Movements

In other news, Nike Inc (NYSE: NKE) saw a 2.2% dip after predicting first-quarter revenue below Wall Street's expectations. However, Carnival (NYSE: CCL) Corp's stocks soared by 9.3% following Jefferies' decision to upgrade the cruise operator's stock from "hold" to "buy".

As the day progressed, advancing issues outnumbered decliners on the NYSE and Nasdaq, a positive sign for market performance. Furthermore, both the S&P and Nasdaq indexes recorded new 52-week highs, underscoring the overall positive sentiment on Wall Street.