The U.S. stock market ended higher on Friday, with the S&P 500 and the Nasdaq notching their seventh straight session of gains. This marked the biggest weekly percentage gains of the year as worries of an economic downturn eased and investors shifted their focus to the upcoming Jackson Hole Economic Symposium. The recent sell-off triggered by weak economic data and recession fears had pushed the Nasdaq into correction territory. However, the market rebounded as positive economic data provided assurances that inflation is trending towards the Federal Reserve’s target and consumer spending remains healthy. This newfound confidence among investors is largely driven by the expectation that the Fed will begin cutting rates in September.
Global central bank officials are set to speak at the upcoming symposium in Jackson Hole, Wyoming, with Fed Chair Jerome Powell’s keynote speech on Friday being a focal point. Powell’s comments are anticipated to set expectations for the trajectory of U.S. rate cuts. Market activity throughout the year has revolved around the likelihood and extent of Fed rate cuts. The financial markets currently predict a 74.5% chance of a 25 basis point rate cut at the Fed’s September policy meeting, with a diminishing 25.5% likelihood of a more substantial 50-basis-point cut.
The Dow Jones Industrial Average rose 96.7 points, the S&P 500 gained 11.03 points, and the Nasdaq Composite added 37.22 points. Among the 11 major sectors of the S&P 500, financials experienced the most significant percentage gain, while industrials suffered the largest drop. Applied Materials (NASDAQ:AMAT) saw a 1.9% decline despite forecasting stronger-than-expected fourth-quarter revenue. Meanwhile, Amcor (NYSE:AMCR) reported a bigger-than-anticipated decline in fourth-quarter sales, leading to a 3.7% drop in its U.S.-listed shares.
Advancing issues outnumbered decliners on the NYSE by a ratio of 2.22-to-1, while on Nasdaq, advancers led decliners by a ratio of 1.53-to-1. The S&P 500 recorded 13 new 52-week highs and no new lows, while the Nasdaq Composite saw 66 new highs and 85 new lows. Volume on U.S. exchanges reached 10.11 billion shares, below the 12.27 billion average for the past 20 trading days.
The recent market performance reflects a renewed sense of confidence among investors fueled by positive economic data and anticipation of potential rate cuts by the Fed. The upcoming Jackson Hole Economic Symposium and Jerome Powell’s keynote speech will be closely watched for further insights into the Fed’s monetary policy direction. As the market continues to navigate economic uncertainties and global developments, investors remain optimistic about the prospects of sustained growth and stability in the near term.