Stocks ended the week on a high note, reversing early August losses and securing the best week of the year for major indexes. The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all posted gains, driven by strong economic data and corporate earnings reports that eased recession fears.
Key Takeaways
- Major indexes secured their best week of the year, reversing early August losses.
- Strong retail sales and corporate earnings reports fueled the rally.
- Investors are optimistic about a potential soft landing for the economy.
Market Performance
The S&P 500 rose 0.2% on Friday, marking its seventh consecutive gain and pulling back within 2% of its all-time high. The Nasdaq Composite and Dow Jones Industrial Average also gained 0.2%, contributing to the best week for stocks since November.
Economic Data
Two key readings on the US consumer—monthly retail sales and Walmart’s latest earnings report—catalyzed Thursday’s gains. Retail sales rose 1% in July, far exceeding Wall Street’s expectations of a 0.4% increase. Walmart also posted strong earnings, with a 4.2% increase in comparable U.S. sales.
Federal Reserve and Interest Rates
Following the positive economic data, investors have pared back some of their more dramatic bets on rate cuts from the Federal Reserve. Data from the CME Group shows a 66% chance of a 0.25% rate cut next month, down from near-certainty of a 0.50% cut during the market’s most turbulent moments last week.
Corporate Earnings
Corporate earnings continue to show strength, with about 93% of S&P 500-listed firms having posted results as of Friday afternoon. More than 78% of these companies have surpassed Wall Street’s expectations. Notable performers include Walmart, which saw its stock rise more than 6% after a positive earnings report, and Nvidia, which is up more than 21% this month.
Sector Performance
Technology and Consumer Discretionary sectors led the rally, with both rising more than 2.6%. Nvidia, a key player in the AI market, saw its stock increase by more than 21%, contributing significantly to the tech sector’s performance.
Upcoming Events
Investors are now looking ahead to next week’s Jackson Hole Symposium, where Federal Reserve Chair Jerome Powell is set to speak. The speech is expected to provide more clarity on the Fed’s future monetary policy actions.
Conclusion
The stock market’s strong performance this week has eased recession fears and boosted investor confidence. With positive economic data and strong corporate earnings, the outlook for the US economy appears optimistic, setting the stage for potential gains in the coming months.
Sources
- Stock market today: Stocks secure best week of the year, reversing early August sell-off, Yahoo Finance.
- Stock Market Today: What to Watch, WSJ.
- Stock market today: Wall Street closes its best week of the year with some more gains | AP News, AP News.
- Stock Chart Icon, CNBC.
- Stock market today: S&P 500, Nasdaq rally to fully recoup losses from August sell-off, Yahoo Finance.