U.S. stocks closed sharply higher Friday as the tech sector recovered, earnings gave a big boost to several companies and inflation data reinforced expectations that the Federal Reserve will cut interest rates soon.
The Dow Jones Industrial Average added 1.6%, a 654-point gain, while the S&P 500 and Nasdaq Composite gained 1.1% and 1.0%, respectively. The S&P 500 and Nasdaq snapped three-session losing streaks, but still finished lower for the week, while the Dow posted a slight weekly gain.
Investors reacted positively to news early Friday that the Federal Reserve’s preferred measure of inflation showed that price pressures moderated in June. Fed officials have said they are looking for further evidence that inflation is under control before it starts cutting its benchmark interest rate, and Friday’s data helped solidify the expectation that the central bank will do so by September.
Among the mega-cap stocks on the move Friday, chipmaker Nvidia (NVDA), Apple (AAPL) Microsoft (MSFT) Meta Platforms (META) and Amazon (AMZN) all higher gained ground. Shares of chipmakers were also broadly higher, with the iShares Semiconductor ETF (SOXX) gaining 2.1%.
Tech stocks, which have led the market’s strong performance for most of the year, have lost ground recently as investors rotate into small-cap stocks that stand to benefit most from the expected rate cuts by the Fed. The Russell 2000 small-cap index rose 1.7% Friday and gained more than 3% for the week.
The big mover on the Dow Friday was conglomerate 3M (MMM), which rose 23% after reporting strong earnings and boosting guidance. Other post-earnings gainers included Hoka-maker Deckers (DECK), Charter Communications (CHTR), and Bristol-Myers Squibb (BMY). The big decliner was medical devices company Dexcom (DXCM), which fell 40% after reporting weak earnings and slashing guidance.
:max_bytes(150000):strip_icc():format(webp)/GettyImages-1742087002-498e20a1c22b4dbbadfa0c83024df728.jpg)
Bitcoin surged to near $68,000 ahead of a speech that former President Donald Trump, the Republican nominee in the 2024 presidential election, will make at a crypto conference over the weekend. Crypto-related stocks were also moving higher Friday.
The yield on the 10-year Treasury, which is sensitive to expectations about possible rate cuts, fell to 4.19% from 4.24% yesterday. Gold futures were up about 1%, while crude oil was down about 2%.
