Tech Rally Wavers After Intel’s Weak Forecast

U.S. equities indexes were mixed on Friday. Inflation watchers received favorable news as Personal Consumer Expenditure (PCE) data revealed the lowest increase in core prices since March 2021, but the recently hot tech sector dragged on the markets after Intel (INTC) provided a weaker-than-expected quarterly outlook.

The S&P 500 slipped less than 0.1%, ending its streak of record-high closes that extended back to the end of last week. Underperformance in tech contributed to a 0.4% slide in the Nasdaq, while the Dow eked out a gain of 0.2%. Despite Friday’s less decisive performance, all three major indexes posted weekly advances.

Intel was Friday’s weakest stock in the S&P 500 Friday, with shares falling 11.9%. Although the computing giant beat estimates for the fourth quarter, its guidance for the current quarter fell short of expectations, with softness at several subsidiaries and its programmable chip unit set to pressure its results.

The underwhelming forecast from Intel may have dampened enthusiasm for the semiconductor industry, which has been flying high amid lofty expectations for artificial intelligence (AI). KLA Corp. (KLAC) issued its own lower-than-expected guidance, citing an uncertain growth trajectory for its wafer fab equipment (WFE) business, and its shares dropped 6.6%. Shares of fellow semiconductor equipment firms Applied Materials (AMAT) and Lam Research (LRCX) fell more than 3%.

Shares of Fair Isaacs Corp. (FICO) lost 6.9% after the financial analytics and credit scoring firm’s quarterly profits and revenues fell short of Wall Street’s expectations. The company reported a year-over-year increase in operating expenses, with research and development as well as selling, general, and administrative costs ticking higher.

American Express (AXP) led the S&P 500 and the Dow on Friday, with gains of 7.1% lifting the stock to its all-time high. Although the credit card provider reported weaker-than-expected fourth-quarter results, Amex cited strong business momentum as it delivered positive 2024 guidance and boosted its dividend by 10 cents per share.

Shares of Airbnb (ABNB) advanced 5.3% after the online accommodation platform announced it would increase the fees it charges users for cross-currency bookings. The move comes as the company aims to increase its presence in international markets.

Capital One (COF) shares gained 4.7% after the credit card lender released fourth-quarter results, exceeding revenue estimates but missing bottom-line forecasts. Despite the mixed earnings report, the financial firm the state of the consumer and the health of the credit markets.