Stock market today: Alphabet and Microsoft propel Wall Street toward its first week of gains in a month | Nation & World Business

NEW YORK (`) — Alphabet and Microsoft led the U.S. stock market on Friday at the end of its first successful week in the past four weeks.

The S&P 500 was 0.7% higher in early trading. The Dow Jones Industrial Average rose 76 points, or 0.2%, as of 9:40 a.m. Eastern time, and the Nasdaq Composite was 1.4% higher.

Alphabet rose 11% after beating analysts' earnings expectations in its latest quarter. Google's parent company also announced it would pay a dividend to investors, a sign that it is generating even more money than it plans to spend on investments.

Meanwhile, Microsoft climbed 1.7% after it also reported higher-than-expected profit and revenue. The company cited strong growth in its cloud computing business as it makes artificial intelligence technology available to its customers.

They helped offset Intel's 12.5% ​​decline. The company reported higher-than-expected profit for its latest quarter, but revenue fell short of analysts' estimates. This also applies to the profit forecast for the current quarter.

Stocks across the board have been under pressure this month as hopes for several interest rate cuts from the Federal Reserve this year fade. A series of reports this year showing inflation remains worse than forecast has traders expecting interest rates to be cut perhaps once this year, up from six or more earlier in the year.

Another report on Friday showed that inflation remains stubbornly high. This time it was the March price benchmark that the Federal Reserve prefers to use. But it wasn't much worse than forecast, and financial markets took it much more calmly than a report on Thursday that suggested the same inflation rate rose quickly from January to March.

Treasury yields in the bond market fell after the inflation report. The yield on the 10-year Treasury note fell to 4.66% from 471% late Thursday.

Although inflation remains higher than forecast, EY chief economist Gregory Daco expects it to cool in the coming months as shoppers cut back on purchases under pressure from slower wage growth, which is the fuel that fuels inflation gives.

“Consumers remain willing to spend money, but not on anything and not at any price,” he said.

Economists also said Thursday's weaker-than-expected data on the overall U.S. economy, which led to a decline in stock prices, may not be as bad as it seemed on the surface.

“The economy remains on solid footing,” Bank of America economists said in a report, citing solid buying trends among U.S. customers. Such a reading helps allay fears that the U.S. economy could be heading toward a toxic mix of stagnant growth and high inflation that the Federal Reserve lacks the right tools to address.

However, Thursday's higher-than-expected inflation readings will likely prompt the Fed to take a “wait-and-see approach to cuts while giving policymakers more time to work” at its next meeting on Wednesday, they wrote in a BofA Global Research report .

The Fed is keeping its key interest rate at its highest level since 2001 in hopes of undercutting inflation by putting downward pressure on the economy and financial markets. Inflation has fallen from its peak, and progress over the past year led to the Federal Reserve recently announcing it could cut interest rates three times this year. But the latest standstill has led top Fed officials to say they may keep interest rates high for a while longer.

In overseas stock markets, Japan's Nikkei 225 rose 0.8% after the Bank of Japan ended a monetary policy meeting without any significant changes. Indices were higher in much of Asia and Europe.

` business reporter Yuri Kageyama contributed.

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