Highlights
An in-line inflation report and upbeat consumer spending news perked up equities Friday with growth and value sectors seeing good gains to end the month on a high note.
The Dow Jones industrial average advanced 0.6 percent, the S&P 500 rose 1.0 percent, and the Nasdaq was up 1.1 percent. Bond yields and the dollar rose while oil prices fell back after their rally Thursday.
Stocks got a lift from word that the personal consumption expenditure deflator and the core PCE deflator both rose an as-expected 0.2 percent on the month in July. The result appeared to confirm the view that the Federal Reserve will begin cutting interest rates in September. Investors also reacted favorably to news that personal consumption expenditures gained a robust 0.5 percent in July, with support from a slightly better than expected 0.3 percent rise in personal income. Finally, the market liked the University of Michigan consumer sentiment report showing lower than expected one-year inflation expectations.
Friday's economic news fed the hopeful narrative that a soft landing continues to unfold with inflation fading, moderate growth continuing, and corporate profits set to reward investors. Stocks saw volatility in August after weaker than expected employment data triggered concerns about recession. With Friday's reassuring news, the market was ending the month mostly higher and on much stronger footing.
Among key sectors, the Magnificent Seven bounced back Friday, paced by Nvidia, which saw bargain-hunting after Thursday's losses. Heavy-weights Alphabet, Amazon, Microsoft and Tesla were among the day's best performers. Other leaders included technology hardware -- paced by strong results from Dell -- plus money center banks, airlines, and capital goods makers. In the tech space, Intel was another big winner on news the struggling chipmaker may sell its foundry business.
Lagging were energy, media, metals, auto rental and cruise lines.
The Dow Jones industrial average advanced 0.6 percent, the S&P 500 rose 1.0 percent, and the Nasdaq was up 1.1 percent. Bond yields and the dollar rose while oil prices fell back after their rally Thursday.
Stocks got a lift from word that the personal consumption expenditure deflator and the core PCE deflator both rose an as-expected 0.2 percent on the month in July. The result appeared to confirm the view that the Federal Reserve will begin cutting interest rates in September. Investors also reacted favorably to news that personal consumption expenditures gained a robust 0.5 percent in July, with support from a slightly better than expected 0.3 percent rise in personal income. Finally, the market liked the University of Michigan consumer sentiment report showing lower than expected one-year inflation expectations.
Friday's economic news fed the hopeful narrative that a soft landing continues to unfold with inflation fading, moderate growth continuing, and corporate profits set to reward investors. Stocks saw volatility in August after weaker than expected employment data triggered concerns about recession. With Friday's reassuring news, the market was ending the month mostly higher and on much stronger footing.
Among key sectors, the Magnificent Seven bounced back Friday, paced by Nvidia, which saw bargain-hunting after Thursday's losses. Heavy-weights Alphabet, Amazon, Microsoft and Tesla were among the day's best performers. Other leaders included technology hardware -- paced by strong results from Dell -- plus money center banks, airlines, and capital goods makers. In the tech space, Intel was another big winner on news the struggling chipmaker may sell its foundry business.
Lagging were energy, media, metals, auto rental and cruise lines.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
