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Key Takeaways
- The S&P 500 jumped 1.1% on Tuesday, March 12, 2024, with tech stocks leading the way to a record close even as February CPI data came in hot.
- Shares of Oracle soared after results showed the software giant’s cloud business benefitting from AI-related demand.
- Airline stocks tumbled as carriers warned that slower delivery of new jets and higher fuel costs could affect their performance.
Major U.S. equities indexes pushed higher even as the latest inflation data showed consumer prices climbed more than expected in February, adding to doubts about how soon the Federal Reserve might cut interest rates.
The signals of persistent inflation were not enough to derail the rallying tech sector, which once again led the indexes higher. The S&P 500 was up 1.1% on Tuesday, posting an all-time closing high. The Nasdaq and the Dow added 1.5% and 0.6%, respectively.
Oracle (ORCL) shares led the way higher for the S&P 500, surging 11.8% after the software giant beat quarterly profit estimates, with its cloud business benefitting from artificial intelligence (AI) demand. Oracle also pointed to a forthcoming joint announcement with customer and AI chip behemoth Nvidia (NVDA), whose shares added 7.2% on the day. Shares of fellow enterprise cloud software provider ServiceNow (NOW) also rode the latest wave of AI optimism higher, gaining 4.3%.
3M shares (MMM) moved 5.0% higher after the industrial conglomerate announced that William Brown, previously the head of L3Harris Technologies (LHX), would become its new CEO. Brown steps into the role after a tumultuous year in which 3M settled several liability-related lawsuits.
Shares of Archer Daniels Midland (ADM) jumped 3.9% after the agricultural firm addressed accounting issues that have been in the spotlight since the company launched an internal probe in January. The company indicated it has a plan in place to shore up weaknesses in its pricing and reporting processes, ensuring greater transparency and reliability of its financial statements.
Airline stocks sank on Tuesday as several major carriers highlighted issues that could negatively affect their results. Southwest Airlines (LUV) said it would cut capacity because of slower-than-expected deliveries of new aircraft from Boeing (BA). Southwest shares plunged 14.9%, marking the steepest losses on the S&P 500, while Boeing shares were down 4.3%. Meanwhile, American Airlines (AAL) said higher fuel costs would impact current quarter results, and its shares sank 4.7%.
Shares of Enphase Energy (ENPH) dropped 6.0% after analysts at Piper Sandler trimmed their price target on the stock, citing reduced growth expectations for the solar technology company over the coming year.
Illumina (ILMN) shares fell 4.6% amid reports that activist investor Carl Icahn would no longer pursue plans to replace additional directors on the board of the DNA sequencing company. Icahn filed a lawsuit last year claiming the Illumina board violated fiduciary duties, which remains pending.