On Friday, Wall Street’s primary indices closed with significant gains, driven by robust performances from heavyweight technology and growth stocks, as Treasury yields stabilized. Investors were also looking ahead to next week’s reports on inflation and other economic data.
The tech-heavy Nasdaq Composite (.IXIC) recorded its most substantial single-day percentage increase since May 26.
This rally marked a strong rebound from the previous session’s decline, which followed hawkish comments from Federal Reserve Chair Jerome Powell regarding interest rates. The previous day’s drop had halted the longest winning streaks in two years for both the S&P 500 (.SPX) and the Nasdaq.
Investor attention has been fixated on benchmark Treasury yields, which have somewhat eased from their 16-year highs.
Monetary policy has also been a point of focus, as investors assess whether the Fed may halt its rate hikes to curb inflation and potentially even start reducing rates.
Chuck Carlson, the CEO at Horizon Investment Services, noted, “We have had rates roll over here a little bit, and I think that’s one of the reasons we have seen this rally over the last couple of weeks.
If you think this rally has legs, yesterday gave you an opportunity to go buy some stocks today.”
In the coming week, the consumer price index report, along with data on producer prices and retail sales, will be closely monitored. These reports will play a significant role in shaping interest rate projections.
“In general, the expectation investors have is that the upcoming inflation data is going to be positive for the market, and I think they want to get in front of it a little bit,” said Rick Meckler, a partner at Cherry Lane Investments.
The Dow Jones Industrial Average (.DJI) rose 391.16 points, or 1.15%, to 34,283.1, the S&P 500 (.SPX) gained 67.89 points, or 1.56%, to 4,415.24, and the Nasdaq Composite (.IXIC) gained 276.66 points, or 2.05%, to 13,798.11. The S&P 500 reached its highest closing level since September 19.
All 11 S&P 500 sectors ended in positive territory, led by a 2.6% gain for the technology sector (.SPLRCT). Megacap stocks that have driven the market higher this year, such as Nvidia (NVDA.O), Meta Platforms (META.O), and Microsoft (MSFT.O), also rose solidly on Friday.
For the week, the Dow rose about 0.7%, the S&P 500 gained 1.3%, and the Nasdaq climbed 2.4%.
Supporting equities, the yield on the benchmark 10-year Treasury note remained relatively stable at 4.62%, a day after a jump that was partly influenced by a weaker-than-expected 30-year bond auction.
In company news, Illumina (ILMN.O) saw its shares drop by 8% as the genetic testing company trimmed its full-year profit forecast for the second consecutive quarter.
Advancing issues outnumbered decliners by a ratio of 2.7-to-1 on the NYSE, with 70 new highs and 152 new lows. On the Nasdaq, 2,589 advancing issues outnumbered decliners by a ratio of 1.6-to-1, with 61 new highs and 353 new lows.
Trading volume amounted to approximately 10.2 billion shares in U.S. exchanges, slightly below the roughly 11 billion daily average over the last 20 sessions.