Stock market surge/ Wall Street gains/ US stock rally/ Newslooks/ NEW YORK/ Wall Street stocks surged on Friday, pushing the S&P 500 closer to record highs as technology stocks drove gains. The market’s rally marks its fourth winning week in five, supported by easing Treasury yields and growing optimism ahead of the Federal Reserve’s interest rate decision next week. Consumer sentiment also surpassed expectations, adding to the market’s upward momentum.
Wall Street Quick Looks:
- S&P 500 up 0.5%, nearing record highs set in July.
- The Dow Jones rose by 295 points, while Nasdaq gained 0.5%.
- Technology stocks, led by Nvidia and Oracle, fueled market gains.
- Oracle stock surged 16% for the week, its best performance in two decades.
- Easing Treasury yields ahead of the Fed meeting provided market support.
- Speculation surrounds a potential interest rate cut by the Fed next week.
- RH shares jumped 22.6% after posting strong earnings.
- Uber climbed 6.8% on autonomous ride-hailing news with Waymo.
- Boeing dropped 2% due to a worker strike.
- Adobe fell 8.9% despite strong earnings, as forecasts fell short.
Wall Street Nears Record Highs Amid Tech Rally
Deep Look:
Wall Street saw a significant rally on Friday, bringing major indexes closer to record levels and closing out a strong week for U.S. stocks. The S&P 500 climbed 0.5% during morning trading, narrowing the gap to just 0.7% below its all-time high, set in July. This marks the fourth winning week in the past five, with the index recovering nearly all of last week’s steep losses, which had been its worst performance in nearly 18 months.
The Dow Jones Industrial Average was also on the rise, gaining 295 points, or 0.7%, by mid-morning, while the Nasdaq composite followed suit, climbing 0.5%. Leading the charge were technology stocks, especially giants like Nvidia and Oracle, which have been instrumental in pushing the market higher this week. Nvidia, along with other major tech players, had previously struggled over concerns that their stock prices had become overvalued amid the artificial intelligence boom earlier this year. However, renewed investor confidence has helped lift these stocks once again.
Oracle played a major role in Friday’s gains, adding to the market’s momentum after delivering long-term financial forecasts that exceeded analyst expectations. The software company’s stock jumped by 2%, capping a strong week that began with a better-than-anticipated profit report for its most recent quarter. With a 16% increase over the week, Oracle is on track for its best weekly performance in over 20 years, signaling growing optimism around its future growth.
Adding to the positive sentiment on Wall Street, the bond market lent support as Treasury yields eased ahead of next week’s Federal Reserve meeting. Investors are anticipating the central bank’s first interest rate cut in more than four years, potentially offering further relief to the economy. The Federal Reserve has kept interest rates at their highest level in two decades in an effort to control inflation, which has been steadily decreasing since its peak two summers ago. The shift in focus has now turned to the cooling job market and overall economic slowdown.
The big question now facing the Federal Reserve is how aggressively to cut rates. While lowering rates can help ease economic pressure, there is also the risk that it could reignite inflation. Reports earlier this week indicated that inflationary pressures may still be present, which briefly dampened expectations for a significant rate cut. However, by Friday, traders were seeing a nearly 50-50 chance that the Fed might opt for a larger-than-usual rate reduction of half a percentage point, rather than the standard quarter-point cut.
Treasury yields responded accordingly, with the yield on the 10-year Treasury note falling slightly to 3.66%, down from 3.68% the previous day. Meanwhile, the two-year yield, which is more closely tied to Federal Reserve policy expectations, dropped to 3.59% from 3.65%, reflecting growing optimism about the possibility of a rate cut.
Several individual stocks made notable moves during Friday’s trading. Home-furnishings retailer RH saw its stock soar by 22.6% after reporting better-than-expected earnings and revenue for the latest quarter. The company attributed its strong performance to increasing demand, even in what it described as “the most challenging housing market in three decades.” High mortgage rates have weighed on the housing market in recent years, though there has been some relief as Treasury yields have eased since the spring, thanks to the anticipation of rate cuts.
Uber Technologies also had a standout day, with its stock climbing 6.8% after the company announced plans to introduce autonomous ride-hailing services in Austin and Atlanta in partnership with Waymo starting early next year. This announcement reflects growing enthusiasm around the future of autonomous vehicles and their potential to revolutionize the ride-hailing industry.
Not all stocks benefited from the market’s positive momentum. Boeing saw its shares drop by 2% after its assembly workers walked off the job on Friday. The workers, represented by their union, overwhelmingly voted to go on strike after rejecting a proposed contract that would have raised wages by 25% over four years. This walkout could have significant ramifications for Boeing, which has faced numerous challenges in recent years, from production delays to regulatory scrutiny.
Additionally, Adobe shares tumbled 8.9%, even though the company reported better-than-expected earnings for its latest quarter. Analysts noted that investors were more concerned with Adobe’s financial forecasts for the upcoming quarter, which fell short of expectations and raised concerns about future growth.
Globally, European stock markets ended higher on Friday, following a mixed performance across Asia, further highlighting the mixed sentiment seen across international markets.
