(ABM FN-Dow Jones) US stock markets were trading sharply higher on Friday with a few hours of trading still to go. The S&P 500 rose 1.6 percent to 5,483.09 points, the Dow Jones index gained 2.0 percent to 40,725.61 points and the Nasdaq was trading 1.5 percent higher at 17,438.16 points.
After a failed attempt at recovery on Thursday, Wall Street is still managing to maintain its upward path on Friday. On a weekly basis, losses are looming for the Nasdaq in particular, and the S&P 500 is also slightly down.
“On Thursday, investors once again dumped large technology and AI-related stocks in favor of small caps and cyclical sectors,” said investment specialist Justin Blekemolen of online broker Lynx.
Friday’s focus was on the Federal Reserve’s important PCE inflation. In June, core inflation came in at 2.6 percent, the same as in May and in line with expectations. The regular index was also not surprising, with a decline of 2.6 to 2.5 percent.
The Fed is set to make its interest rate decision next Wednesday, with rates likely to remain unchanged despite former Fed governor William Dudley calling on his old employer last week to cut rates next week to avert a potential recession.
“No surprises in the June PCE data, which was well received by the bond market, with Treasury yields falling across the curve,” noted Tim McDonough, vice president and senior portfolio manager at Key Wealth. The Fed could be setting markets up next week for a first cut in September, the market expert said.
One of the key issues ahead of next week’s U.S. rate decision will be the extent to which Fed officials are hinting at a possible rate cut in September, according to Russell Investments investment strategist BeiChen Lin.
On the one hand, the reduced inflationary pressures “provide ample support for a possible rate cut in September,” Lin said. “On the other hand, we have seen many times this cycle that the pace of disinflation is nonlinear.”
The US 10-year yield fell 3 basis points to 4.21 percent, while the two-year variant fell 4 points to 4.398 percent.
Furthermore, consumer confidence as measured by the University of Michigan also contained few surprises. Confidence fell slightly less than previously forecast in July, while inflation expectations came in at 2.9 percent.
The euro/dollar was trading at 1.0863 on Friday evening, while oil prices fell around one percent as hopes for a ceasefire in Gaza grow.
Company news
Alphabet and Tesla were the ones getting the brunt of the week after disappointing numbers. On a weekly basis, both companies are facing losses of around 6 to 7 percent. Towards the weekend, Alphabet gained 0.2 percent and Tesla 0.8 percent. OpenAI announced that it has tested new artificial intelligence search capabilities with a temporary prototype called SearchGPT. Alphabet’s Google is the most dominant global search engine.
Ford Motor rose 1.3 percent after the automaker’s shares plunged 18.4 percent on Thursday following disappointing quarterly results. The company also left its full-year profit outlook unchanged, which also disappointed investors.
Colgate-Palmolive has raised its outlook for this year again, it became clear on Friday during the quarterly figures. The share rose 3.8 percent.
3M posted strong results in the second quarter and, like Colgate, raised its outlook for the full year 2024. The stock rose as much as 18.5 percent.
Notable price movements were seen on Friday for stocks including Dex.Com, Deckers Outdoor and Coursera.
DexCom, a maker of glucose monitoring devices, fell 42 percent after cutting sales forecasts for this fiscal year.
Deckers Outdoor raised its profit outlook after both profit and revenue beat analysts’ expectations in the past quarter. The maker of Hoka sneakers and Ugg boots rose 8.2 percent.
Online learning platform Coursera reported good numbers that exceeded analysts’ expectations, with its stock rising as much as 48 percent on Friday.
Source: ABM Financial News
ABM Financial News is a supplier of stock market news, video and data, both for real-time trading platforms and dealing rooms and for online and offline media publications. The information in this article is not intended as professional investment advice or as a recommendation to make certain investments.
