Stocks Recover, Yet Weekly Losses Loom, Dollar Notches 8 Weeks of Gains: What's Driving Markets Friday?

Sentiment saw a revival on Friday, but stocks are still on track for a weekly decline.

Apple Inc. AAPL rose 1%, putting a halt to the 6% decline observed over the last two sessions due to concerns regarding a potential Chinese ban on iPhones.

Meanwhile, the U.S. dollar is on track for its eight straight week of gains, the longest streak since 2014.

Investors have almost entirely factored in an impending pause in Fed interest rates for this month, ahead of the critical CPI and PPI reports scheduled for next week. Economists are forecasting an increase in the annual inflation rate from 3.2% to 3.6%.

Cues From Friday’s Trading:

Both the Dow Jones Industrial Average and the S&P 500 Index experienced a 0.2% increase. The S&P 500 is poised for a 1.2% weekly decline, while the Dow has seen a 0.7% drop over the week.

The Nasdaq 100 tilted 0.3% higher, down 1.3% for the week. Small caps in the Russell 2000 held flat on the day, but fell over 3% this week.

Thursday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 0.2% higher to $445.86.
• The SPDR Dow Jones Industrial Average ETF DIA rose 0.2% to $346.50.
• The Invesco QQQ Trust QQQ gained 0.3% to $373.10, according to Benzinga Pro data.

Looking at S&P 500’s sectors:

• The Energy Select Sector SPDR Fund XLE continued to outperform, up 1.4%.
• The Real Estate Select Sector SPDR Fund XLRE was the laggard, down 0.5%.

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Analyst Color:

Even with the recent weakness, the major averages are sporting healthy gains for the year-to-date period. “With the S&P still up over 16% YTD and the NASDAQ +32%, some downward volatility is inevitable, especially in a traditionally seasonally weak month,” said fund manager Louis Navellier.

“It is likely that in the 4th quarter, we’ll look back on any major pullbacks we’ll be seeing in the weeks ahead as buying opportunities if the soft landing forecasts hold,” he added.

Stocks In Focus:

DocuSign, Inc. DOCU fell 2% in premarket trading following the release of its quarterly results.

Among the other stocks moving in reaction to earnings include RH RH (down 14%), Semtech Corp. SMTC (down 2%), Smartsheet, Inc. SMAR (up over 9%), Smith & Wesson Brands, Inc. SWBI (up over 11%) and Zumiez, Inc. ZUMZ (down about 10%).

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 0.9%, with a barrel of WTI-grade crude trading at $87. The United States Oil Fund ETF USO was 0.7% higher to $78.  

Treasury yields were mostly flat, with the 10-year yield at 4.26% and the two-year yield at 4.97%. The iShares 20+ Year Treasury Bond ETF TLT was 0.2% higher for the day. 

The U.S. dollar index, as tracked by the Invesco DB USD Index Bullish Fund ETF UUP, was flat. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.1% higher to 1.0703.

European equity indices closed in the green. The SPDR DJ Euro STOXX 50 ETF  FEZ rose 0.4%. 

Gold held flat at $1,919/oz, while silver fell 0.3% to $22.88. Bitcoin BTC/USD was 1.9% lower to $25,777.

Staff writer Piero Cingari updated this report midday Thursday. 

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