Wall St advances on Apple gains, inflation reading

Wall Street's main indexes have risen, driven by gains in Apple following its strong sales forecast and a reading of the US central bank's favoured inflation gauge which aligned with expectations that the Fed would keep borrowing costs steady.

US prices increased as expected in December, while consumer spending surged, suggesting that the Federal Reserve has the leeway to delay cutting interest rates for longer this year.

Traders kept their bets on the Fed waiting until June to resume rate cuts at 70 per cent after the data was released, futures that settle to the central bank's policy rate indicated.

Fed Governor Michelle Bowman said she still expects declining inflation to allow further interest-rate cuts this year, but felt rising wages, buoyant financial markets, geopolitical risks and upcoming Trump administration policies could slow the process and keep price pressures elevated.

The central bank held interest rates steady in its latest rate decision earlier this week, and Fed Chair Jerome Powell said there would be no rush to cut them again until inflation and jobs data made it appropriate to do so.

Apple gained 2.9 per cent on upbeat executive comments in its earnings on Thursday, in a sign the company expects to recover from a dip in iPhone sales as it rolls out AI features.

"We still have a 'buy' recommendation on Apple and think that the company is showing some resiliency. Investors were expecting the results to be even weaker than anticipated, so the market is rewarding Apple for holding up quite well," said Sam Stovall, chief investment strategist at CFRA Research.

Chevron fell 2.8 per cent after reporting fourth-quarter earnings below estimates.

Atlassian jumped 18.5 per cent after the enterprise software developer projected third-quarter revenue above estimates and raised its annual revenue forecasts.

In early trading on Friday, the Dow Jones Industrial Average rose 115.92 points, or 0.26 per cent, to 44,998.05, the S&P 500 gained 25.98 points, or 0.43 per cent, to 6,097.15, and the Nasdaq Composite gained 160.80 points, or 0.82 per cent, to 19,842.55.

Six of the 11 S&P 500 sectors traded higher, with communication services leading gains with a 1.1 per cent rise, while technology added 0.6 per cent.

The S&P 500 and the Nasdaq were set for marginal losses for the week as tech shares suffered a rout after Chinese startup DeepSeek unveiled a breakthrough in low-cost artificial-intelligence models, triggering a sell-off in AI-linked stocks.

Despite this week's volatility, all three major indexes were on track for monthly gains, with the S&P 500 being less than one per cent short of its all-time high, hit last week.

Meanwhile, global markets stayed vigilant after President Donald Trump said on Thursday that the US would impose a 25 per cent tariff on imports from Mexico and Canada, repeating his warning ahead of his previously announced Saturday deadline.

Deckers Outdoor dropped 13.3 per cent after the UGG bootmaker's annual sales forecast raise missed lofty expectations following a strong holiday quarter.

Declining issues outnumbered advancers by a 1.09-to-1 ratio on the NYSE, while advancing issues outnumbered decliners by a 1.28-to-1 ratio on the Nasdaq.

The S&P 500 posted 15 new 52-week highs and no new lows, while the Nasdaq Composite recorded 34 new highs and 27 new lows.