A trader works on the floor of the New York Stock Exchange.
Brendan Mcdermid | Reuters
Stocks jumped Friday, and Wall Street capped off a turbulent week on a positive note as investors weighed fresh U.S. inflation data.
The Dow Jones Industrial Average rallied 654.27 points, or 1.64%, to finish at 40,589.34. The S&P 500 climbed 1.11% to end at 5,459.10, while the Nasdaq Composite gained 1.03% to close at 17,357.88.
Friday’s moves stem from a combination of oversold sentiment, a stronger-than-expected GDP report Thursday and the view that the Federal Reserve will begin cutting rates due to economic resilience, said CFRA Research’s Sam Stovall.
“Today’s benign PCE report helped talk the market off the ledge,” he added. “With this pullback, the great rotation lives on and breadth continues to be on our side.”
Investors continued their pivot into cyclical areas of the market and small caps, with the Russell 2000 rising 1.67%. Industrials and materials stocks rose, lifting their respective S&P sectors about 1.7%. 3M skyrocketed 23%, leading the industrials sector to the upside. The stock notched its best day since at least 1972.
Some technology names that have struggled amid this week’s sell-off gained, with Microsoft and Amazon adding more than 1% each. Meta Platforms climbed nearly 3%. The S&P’s information technology sector surged about 1%.
Wall Street also assessed June’s personal consumption expenditures price index, an inflation reading that is preferred by central bank policymakers. On a monthly basis, headline PCE rose 0.1% and 2.5% from a year ago. That was in line with estimates from economists polled by Dow Jones.
This positive inflation news has also lifted investor hopes for more rate cuts this year, with the fed funds futures market pricing in cuts in September, November and December.
“The numbers have been coming in tamer,” said Ken Mahoney, president of Mahoney Asset Management. “In housing and real estate, you’re starting to see some cracks. They’re going to stop messing around, start cutting rates.”
That data comes at the end of a volatile week on Wall Street. The S&P 500 declined 0.8%, while the Nasdaq lost 2.1%. Both indexes posted back-to-back weekly losses for the first time since April. The Dow outperformed, adding 0.8%, and notching its fourth consecutive positive week for the first time since May. The action came as investors seemed to participate in a rotation into small caps and cyclicals.
S&P 500 Index
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5,459.10
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SPX 5-day chart
In other news, medical device maker Dexcom plunged 41% after releasing disappointing fiscal full-year guidance. Footwear company Deckers reported fiscal first-quarter earnings and revenue that exceeded analysts’ expectations, boosting shares 6%.
14 HOURS AGO
Stocks finish higher, Dow jumps more than 600 points
Stocks finish higher on Friday to cap off a volatile trading week.
The Dow Jones Industrial Average rallied 654.27 points, or 1.6%, to finish at 40,589.34. The S&P 500 climbed 1.1% to end at 5,459.10, while the Nasdaq Composite gained 1% to close at 17,357.88.
— Samantha Subin
15 HOURS AGO
3M heads for best day in more than half a century
3M shares tracked for their best day in more than 50 years on the back of better-than-predicted earnings.
The office suppliers maker jumped more than 21% in afternoon trading. If that holds through Friday’s closing bell, it will mark the stock’s biggest one-day gain since at least 1972.
3M Co
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127.16+23.77 (+22.99%)
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3M, 1-day
Friday’s jump comes after the company easily beat expectations of analysts on both lines for the second quarter. 3M earned $1.93 per share, excluding items, on $6.26 billion in revenue, while analysts expected just $1.68 in earnings per share and $5.88 billion in revenue.
3M was the best performer in the blue-chip Dow in Friday afternoon trading. Shares also touched a new 52-week high amid the rally.
With this advance, shares are up more than 37% on the year.
— Alex Harring
15 HOURS AGO
Talking about substantial number of rate cuts is ‘premature,’ Torsten Slok says
Apollo’s Torsten Slok still thinks that discussion around more interest rate cuts in the future is “premature” following Friday’s PCE report.
“At the end of the day, if the strength of the economy is still running the risk here that we might get another … flare up or more tailwinds to the economic outlook, then I do think it’s premature to take out the champagne bottle and begin to talk about a dramatic amount of rate cuts coming,” the firm’s chief economist told CNBC’s “Squawk on the Street.”
Slok said that while the Federal Reserve may make a cut in September, there needs to be more progress on inflation. He added that he doesn’t believe some weakness in certain labor market indicators justifies the pricing of three cuts this year.
“I still think that the economy is doing quite well,” he continued.
— Sean Conlon
16 HOURS AGO
Fed should be cutting interest rates right now, Wharton’s Jeremy Siegel says
The Federal Reserve should already be lowering interest rates, according to Jeremy Siegel, a finance professor at the University of Pennsylvania’s Wharton School.
“If it were up to me, looking forward, they should be,” he said on CNBC’s “Squawk Box” on Friday morning.
Siegel also said the story of forward-looking inflation looks good for the central bank. He said investors should expect Fed Chair Jerome Powell to “tee up” a rate cut coming in September.
— Alex Harring
17 HOURS AGO
See the stocks moving midday
Nikolas Kokovlis | Nurphoto | Getty Images
These are some of the stocks making the biggest moves in midday trading on Friday:
- 3M — Shares surged more than 18% to hit a 52-week high after the maker of office supplies and adhesives reported stronger-than-expected quarterly results. 3M posted second-quarter adjusted earnings of $1.93 per share, exceeding an LSEG estimate of $1.68 per share. Revenue also topped Wall Street’s forecast.
- Dexcom — Shares plummeted more than 40% after the medical device maker missed expectations for second-quarter revenue and offered soft full-year guidance for the measure. Dexcom said it earned $1 billion in revenue during the three-month period, under the consensus forecast of $1.04 billion from analysts polled by LSEG.
- Coursera — The online course provider soared 37.8% after reporting $170 million in second-quarter revenue, above the consensus estimate of $164 million from analysts surveyed by LSEG.
— Alex Harring