Tech led stock gains in a jittery session before inflation data that will help shape the views on whether a soft landing is on the table amid the Federal Reserve’s most-aggressive tightening campaign in a generation.

After erasing a rally of almost 1 per cent, the S&P 500 came back higher and halted a four-day selloff. The index regained its 4,000 support broken earlier in the week in a fight to stay above a key uptrend line from the October low. The Nasdaq 100 outperformed as huge names like Microsoft Corp. and Apple Inc. rebounded and a bullish revenue forecast from Nvidia Corp. sent the shares up 14 per cent.

Friday’s personal consumption expenditures index is expected to bring an acceleration in both headline and core inflation. In the run-up to the numbers, data showed U.S. growth in the fourth quarter was weaker than previously estimated while the Fed’s preferred inflation figures were revised higher. Separate data highlighted unrelenting labor-market tightness.

To Michael Shaoul at Marketfield Asset Management, investors are caught between welcoming the evidence that the U.S. economy remains on a stable footing and fearing that this resilience will provoke a stern reaction from policymakers.

“Granted things could be worse, the specter of a rapid deterioration of the economic cycle appears to have been banished, with recent economic data and corporate earnings both confirming that although growth has decelerated from the stimulus driven boom, we have not entered a period of obvious weakness,” he added.

Retail traders have retaken a bearish view that dominated their outlook for much of last year after a raucous stock rally hit a wall this month. Following two weeks of tepid optimism, the bull-bear spread from the American Association of Individual Investors survey flipped to -17 in the week ending Feb. 22, the most pessimistic stance since the start of the year.

Billionaire quant investor Cliff Asness warned that U.S. stocks are vulnerable to a macro shock if inflation doesn’t stage a spirited decline as the market expects. The co-founder of AQR Capital Management told Bloomberg Television that despite last year’s declines, equities remain expensive versus history, based on a broad assumption that price growth is set to slow.

The U.S. economy has obstacles to overcome, though there’s still a chance for a soft landing, Jamie Dimon said. “The U.S. economy right now is doing quite well — consumers have a lot of money, they’re spending it, jobs are plentiful,” the JPMorgan Chase & Co.’s chief told CNBC. “Out in front of us there’s some scary stuff.”

In other corporate news, Netflix Inc. tumbled on plans to cut the price of subscriptions in over 100 countries. Domino’s Pizza Inc. sank the most in more than a decade as delivery woes and softening demand caused fourth-quarter sales to trail Wall Street expectations and led management to cut targets for revenue growth.

Elsewhere, Bitcoin is on pace for its second monthly advance, breaking with stocks and other riskier assets that have slid amid renewed concern about rising interest rates. The crypto market’s rally recovers only a sliver of the ground lost last year, when prices tumbled and the collapse of the FTX exchange caused a pullback by investors.

Key events this week:

• BOJ governor-nominee Kazuo Ueda appears before Japan’s lower house, Friday
• U.S. PCE deflator, personal spending, new home sales, University of Michigan consumer sentiment, Friday
• Russia’s invasion of Ukraine hits the one-year mark, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.5 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 0.9 per cent
• The Dow Jones Industrial Average rose 0.3 per cent
• The MSCI World index rose 0.3 per cent

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at US$1.0601
• The British pound fell 0.2 per cent to US$1.2022
• The Japanese yen rose 0.1 per cent to 134.66 per dollar

Cryptocurrencies

• Bitcoin rose 0.6 per cent to US$23,948.35
• Ether rose 2.1 per cent to US$1,652.78

Bonds

• The yield on 10-year Treasuries declined four basis points to 3.87 per cent
• Germany’s 10-year yield declined four basis points to 2.48 per cent
• Britain’s 10-year yield declined one basis point to 3.59 per cent

Commodities

• West Texas Intermediate crude rose 2.2 per cent to US$75.57 a barrel
• Gold futures fell 0.6 per cent to US$1,830.70 an ounce