Stock market today: Nasdaq surges 2% as Big Tech leads rally after earnings

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US stocks bounced back on Friday as Alphabet (GOOG, GOOGL) and Microsoft (MSFT) earnings revived hopes for a sustained Big Tech-led rally, even as a reading on the Federal Reserve's preferred inflation gauge showed price pressures remain sticky.

The S&P 500 (^GSPC) rose 1%, while the tech-heavy Nasdaq Composite (^IXIC) climbed 2%. The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, rose 0.4% or 150 points.

Gains for Alphabet and Microsoft gave stocks a lift, with rises of around 10% and 2%, respectively. The stellar results from the "Magnificent Seven" duo showed how growing demand for AI can boost cloud revenue and signaled that both companies stand to benefit from that boom. Alphabet's market cap surpassed $2 trillion, joining an elite group.

The performance fired up confidence that earnings from the Magnificent Seven techs can lift the broader market out of the doldrums. Those hopes had taken a knock from Meta's (META) disappointing forecast earlier in the week.

At the same time, the market took in the latest reading of the Fed's favored inflation gauge, the personal consumption expenditures price index, for March. The "core" measure in that report, which strips out the cost of food and energy, rose 2.8% over last year, above estimates for 2.7% but unchanged from the previous annual increase.

The reading comes as Wall Street has furiously scaled back its expectations for Fed rate cuts this year. Already, since the start of the year, traders have recalibrated their bets from seven to just one.

In other individual movers, Snap (SNAP) shares rocketed 27% as Wall Street welcomed signs a revamp of its digital ad business is finding takers.

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