U.S. stocks gained momentum on Friday after new inflation data alleviated fears of rate cut delays, buoyed by stronger-than-expected earnings from tech giants Microsoft and Alphabet.

PCE data in line with estimates

Data released Friday showed that the personal consumption expenditures (PCE) price index rose 0.3% from March, as expected. In the 12 months through March, PCE inflation increased 2.7% compared to an expectation of 2.6%.

Excluding volatile items such as food and energy, the PCE price index rose 0.3%, the prior month, as expected and was up 2.8% y/y compared to estimates of 2.7%.

There were fears, largely fueled by stern comments from several Fed officials, that the Fed’s preferred inflation gauge would exceed expectations, further reducing the likelihood of rate cuts by 2024.

Microsoft rallies and Alphabet sets record for strong first-quarter results

Friday’s performance also benefited from strong gains by various tech giants, which have driven the record highs achieved by major Wall Street indexes earlier in the year.

Shares of Alphabet (GOOGL), the parent company of Google, surged 10% to an all-time high, buoyed by first-quarter earnings that surpassed expectations due to strong artificial intelligence product sales. Alphabet also indicated its first-ever dividend of 20 cents per share.

Microsoft (MSFT) shares rose more than 2% on strong demand for AI-linked products. As a result, the company posted better-than-expected first-quarter results.

NVIDIA Corporation (NVDA), a leader in AI, climbed nearly 2%, continuing its recent rally despite other chipmakers’ results casting doubts on AI’s ability to sustain chip demand.

Snap rallies helped by strong results, while Intel falls

Meanwhile, Snap (SNAP) shares rose nearly 24% as the company posted better-than-expected first-quarter results and offered a positive outlook for the remainder of the year.

Other social networking stocks also rose after the U.S. advanced a bill imposing a one-year deadline on TikTok to divest its operations or exit the U.S. market.

Conversely, Intel (INTC) fell 12% following disappointing quarterly results and a bleak forecast for the second quarter.