U.S. equities rose across the board at the close of the week as the Senate passed the Fiscal Responsibility Act, boosting investors' risk appetite, while an uptick in the unemployment rate lessened the potential rate hike risk arising from a staggering growth in nonfarm payrolls.
The Nasdaq 100 index is set to close its fourth consecutive week of advances on the back of the AI boom.
The broad-based rise impacted all 11 S&P 500 sectors, with each showing a positive daily performance. Stock volatility, as measured by the VIX index, popularly known as the fear index, fell to 14.78, the lowest level since the end of June 2021.
Chart Of The Week: Stock Volatility Falls To Lowest Since June 2021
Cues From Friday's Trading:
All major U.S. averages traded in the green, with small caps in the Russell 2000 index outperforming, up 2.6%.
Blue-chip shares also gained strongly, with the Dow Jones Industrial Index adding 600 points or 1.7%. The S&P 500 advanced 1.3%, on course for its third straight week of gains. The tech-heavy Nasdaq 100 index surged 0.6%, bringing its overall year-to-date performance to 33%.
| Index | Performance (+/-) | Value | |
|---|---|---|---|
| Nasdaq 100 | +0.6% | 14,552.9 | |
| S&P 500 Index | +1.34% | 4,276.18 | |
| Dow Industrials | +1.7% | 33,682.15 |
Analyst Color:
The Fed will likely stay pat at the June 13-14 Federal Open Market Committee meeting, said former hedge fund manager Whitney Tilson. He expects the central bank to hold fire yet again in the July meeting as inflation continues to trend downward and the economy slows, thanks to the credit crunch in the banking sector and the housing slowdown.
Due to the same reasons, the Fed will cut rates by 25 basis points in each of the final three Fed meetings of the year, Tilson predicts: "I think this is bullish for stocks," he added.
Friday's Trading In Major US Equity ETFs: In midday trading on Friday, the SPDR S&P 500 ETF Trust SPY was 1.3% higher to $427.4, the SPDR Dow Jones Industrial Average ETF DIA rose 1.9% to $337.23 and the Invesco QQQ Trust QQQ was 0.7% higher to $354.44, according to Benzinga Pro data.
All U.S. equity sectors were positive, with cyclicals outperforming defensive and tech industries. The Materials Select Sector SPDR Fund XLB rocketed 3.3%, the Industrials Select Sector SPDR Fund XLI soared 2.7% and the Energy Select Sector SPDR Fund XLE gained 2.6%.
The Communication Services Select Sector SPDR Fund XLC and the Technology Select Sector SPDR Fund XLK were the undeperformers, up 0.2% and 0.5% respectively.
Latest Economic Data:
The Labor Department reported an impressive 339,000 surge in non-farm payrolls for May, well above the economists' consensus of 180,000, and even higher than the 253,000 jobs that were added in April.
The jobless rate rose 0.3% to 3.5%. Average hourly earnings, a measure of inflation, rose 0.3% month-over-month and 4.3% year-over-year in May.
See also: Futures Trading: Best Futures To Trade
Stocks In Focus:
- MongoDB MDB jumped over 26% to $368.60 as the stock reacted to the company’s quarterly results.
- The Chemours Company CC rose 25% after the company settled a per-and polyfluoroalkyl (PFAS) chemicals litigation.
- 3M Company MMM gained 8% after reaching a tentative settlement worth at least $10 billion with several U.S. cities and towns to resolve water-pollution claims related to PFAS.
- lululemon Athletica, Inc. LULU rose nearly 15% in reaction to the retailer’s quarterly results.
- Dish Network Corp. DISH rose 20%, while T-Mobile US, Inc. TMUS and AT&T Inc. T fell 7% and 4%, respectively, after a Bloomberg report that Amazon.com Inc. AMZN is in talks with the U.S. telecom firms to offer low-cost wireless services to its Prime members.
- Dell Technologies, Inc. DELL rose 4% after stronger-than-expected earnings.
- SentinelOne, Inc. S fell 37%, the largest percent decrease on record for the company, after reporting losses last quarter and missing revenue estimates.
- Guidewire Software, Inc. GWRE fell 15% after revenues miss and guidance cut.
- Commodities, Bonds, Other Global Equity Markets:
Crude oil rose 2%, with a barrel of WTI-grade crude rising to $71.6. The United States Oil Fund ETF USO was 2.3% higher to $63.90 per share.
Treasury yields spiked, with the 10-year yield up by 8 basis points to 3.68% and the two-year yield up 15 basis points to 4.49%. The iShares 20+ Year Treasury Bond ETF TLT was 0.9% lower for the day.
The dollar strengthened, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, up 0.5%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.5% lower to 1.0709.
European equity indices rallied also. The SPDR DJ Euro STOXX 50 Etf FEZ rose 1%.
Gold fell 1.2% to $1,953/oz. The SPDR Gold Trust GLD was 1.3% lower to $181.4. Silver dipped 1% to $23.66, with the iShares Silver Trust SLV down 1% to $21.73 per unit. Bitcoin BTC/USD rose 0.9% to $27,072.
Staff writer Piero Cingari updated this report midday Friday.
Photo via Shutterstock.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
