Friday’s gains on Wall Street were insufficient to erase the damage caused by Wednesday’s market downturn.
The Dow Jones Industrial Average surged 654.27 points, or 1.64%, to close at 40,589.34 on Friday. The S&P 500 climbed 1.11% to finish at 5,459.10, while the Nasdaq Composite rose 1.03% to end at 17,357.88.
Despite Friday’s rally, the S&P 500 declined 0.8% for the week, while the Nasdaq lost a substantial 2.1%. This marked the first back-to-back weekly losses for both indexes since April. The Dow, however, outperformed with a 0.8% gain, marking its fourth consecutive positive week since May.
CFRA Research’s Sam Stovall attributed Friday’s moves to oversold conditions, a stronger-than-expected GDP report on Thursday, and expectations of Federal Reserve rate cuts due to a resilient economy.
“Today’s benign PCE report helped talk the market off the ledge,” Stovall said. “With this pullback, the great rotation lives on and breadth continues to be on our side.”
Headline PCE inflation, the Fed’s preferred measure, rose 0.1% in June, with core inflation (excluding food and energy) increasing by 0.2%. Over the past year, headline prices are up 2.5%, and core prices are up 2.6%. This data supports the expectation of a rate cut in September, which is fully priced in by economists and analysts.
The tech sector, which had been under pressure this week, rebounded on Friday, with Microsoft and Amazon gaining over 1% each. Meta Platforms climbed nearly 3%. However, the S&P 500’s information technology sector still ended the week down 3.75%.
This weakness was reflected in the performance of the big tech stocks: Apple, Microsoft, and Nvidia. Despite a 0.22% gain on Friday, Apple lost 4.1% for the week, maintaining its top spot as the most valuable company with a market cap of $3.44 trillion. Microsoft gained 1.6% on Friday but lost 3.7% for the week, with a market cap of $3.16 trillion. Nvidia added 0.7% on Friday but lost more than 6% for the week, bringing its valuation to $2.78 trillion. Alphabet’s shares fell 7% last week, reducing its market cap to $2.07 trillion, despite a strong quarterly performance.
Tesla shares dipped 0.20% on Friday and shed 10% of their value for the week.
One standout performer on Friday was Newell Brands, whose shares surged 40% following better-than-expected earnings. The company owns a range of consumer products, including Coleman coolers, Rubbermaid products, and Sharpie pens. Despite a 7.8% decline in revenue to $2.03 billion, the company reported significantly improved margins.