Large-Cap Stocks Pause, Small Caps Shine, Oil Makes Comeback: What's Driving Markets Friday?

Wall Street experienced a relatively quiet session as the week came to a close, with the three major averages hovering around parity in midday trading in New York, yet still on course for their third successive week of gains.

Small caps emerged as the market’s brightest pocket, with the Russell 2000 climbing 1.3% Friday and achieving a weekly increase of over 5%, its second-best performance of the year.

Mega-cap stocks, as tracked by the iShares S&P 100 ETF OEF, were flat for the day.

The dollar’s weakening trend persisted, marking its most challenging week since early July. Traders have now fully priced in the Federal Reserve maintaining rates unchanged next month, with an expectation of four rate cuts in the upcoming year.

Treasury yields flattened, with the two-year yield up by 6 basis points and the 30-year yield down by 3 basis points. The widely-followed iShares 20+ Year Treasury Bond ETF TLT is on track for its fourth consecutive week of gains, the longest streak in a year.

Crude oil was a notable mover, rising as much as 4%, nearly offsetting its 4.6% drop on Thursday.

US Index Performance On Friday

Index	Performance (+/-)	Value
Nasdaq 100	+0.09%	15,847.22
S&P 500 Index	+0.11%	4,514.25
Dow Industrials	-0.02%	34,940.89
Russell 2000	+1.33%	1,797.37

• The SPDR S&P 500 ETF Trust SPY was 0.1% higher to $450.94.
• The SPDR Dow Jones Industrial Average ETF DIA fell 0.1% to $349.61. 
• The Invesco QQQ Trust QQQ was up 0.1% to $386.34.
• The iShares Russell 2000 ETF IWM rallied 1.5% to $178.51, according to Benzinga Pro data.

Sector, Industry ETF Performance

Among sectors, energy stocks, as indicated by the Energy Select Sector SPDR Fund XLE, saw a rally, climbing 2.6%.

Conversely, the Health Care Select Sector SPDR Fund XLV and the Communication Services Select Sector SPDR Fund XLC lagged behind, each down by 0.3%.

Among industries, retail stocks experienced a surge, with the SPDR S&P Retail ETF XRT increasing by 2.8%. Other significant gainers included the SPDR S&P Oil & Gas Exploration and Production ETF XOP and the VanEck Oil Services ETF OIH, up 2.7% and 2.6%, respectively.

REITs showed softer performance, with the Vanguard Real Estate ETF VNQ declining by 0.1%.”

Latest Economic Data

• Housing starts increased by 1.9% month-over-month, reaching a seasonally adjusted annual rate of 1.372 million in October 2023 and extending the 7% increase in the previous month, the U.S. Census Bureau reported Friday. The figure came in above market forecasts of 1.35 million.
  
• In October 2023, building permits rose 1.1% month-over-month, reaching a seasonally adjusted annual rate of 1.487 million, an increase from the 1.471 million recorded in September. This marks a rebound from the 4.5% decrease experienced in the preceding month.

Stocks In Focus

• The Gap Inc. GPS soared 29% on an extraordinary earnings beat.
• Ross Stores, Inc. ROST rose nearly 8% on strong quarterly results.
• Expedia Group Inc. EXPE rose 5.3%, reaching levels last seen in May 2023, after Evercore ISI upgraded the stock to Outperform and raised the price target from $135 to $200.
• Applied Materials, Inc. AMAT fell nearly 5% despite reporting better-than-expected results last quarter. The stock faces pressure following a report suggesting the company is facing a U.S. criminal investigation for possibly evading export restrictions on China’s SMIC. Peers KLA Corp. KLAC and Lam Research Corp. LRCX also moved lower.
• ChargePoint Holdings, Inc. CHPT plunged more than 30% in reaction to its preannouncement.

Commodities, Other Global Equity Markets And Crypto

The United States Oil Fund, LP USO, which tracks the price performance of light sweet crude oil, rose 4.04%.

Gold edged 0.1% higher to $1,982/oz, while silver inched 0.2% higher to $23.77. 

European equity indices closed in the green. The SPDR DJ Euro STOXX 50 ETF  FEZ rose 1.3%, but the best performer was the iShares MSCI Norway ETF ENOR, up 2.3%.

In emerging markets, Global X MSCI Argentina ETF ARGT rose 1.9% ahead of the second round of the country’s presidential election over the weekend.

Bitcoin BTC/USD was 0.9% higher to $36,479, while Ethereum ETH/USD fell 0.8% to $1,945. Dogecoin DOGE/USD rallied 5.2%.

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Shanthi Rexaline contributed to this report.

Photo via Shutterstock.