Wall Street’s main indexes ended the day with significant gains, driven by tech and growth stocks as Treasury yields stabilized. Investors are now looking ahead to next week’s reports on inflation and other economic data. The Nasdaq Composite experienced its largest one-day percentage increase since May 26. This rebound follows a previous session of declines prompted by hawkish comments from Federal Reserve Chair Jerome Powell regarding interest rates. The S&P 500 and Nasdaq both saw their longest winning streaks in two years come to an end.
Investors have been closely monitoring benchmark Treasury yields, which have slightly eased from their 16-year highs. They are also paying attention to monetary policy, trying to determine if the Fed will continue raising rates to control inflation or if rate cuts are on the horizon.
The upcoming consumer price index report, along with data on producer prices and retail sales, will be closely watched as they will shape interest rate projections. Investors are generally optimistic about the upcoming inflation data and want to position themselves accordingly.
The Dow Jones Industrial Average rose by 1.15%, the S&P 500 gained 1.56%, and the Nasdaq Composite increased by 2.05%. The S&P 500 reached its highest closing level since September 19. All 11 S&P 500 sectors ended the day in positive territory, with the technology sector leading the way with a 2.6% gain. Megacap tech stocks, such as Nvidia, Meta Platforms, and Microsoft, also saw solid increases.
Despite a decline in U.S. consumer sentiment and rising inflation expectations, equities were supported by little change in the yield on the benchmark 10-year Treasury note. However, Illumina shares dropped 8% as the genetic testing company lowered its full-year profit forecast for the second consecutive quarter.
Advancing issues outnumbered decliners on both the NYSE and Nasdaq, with the NYSE recording 70 new highs and 152 new lows, and the Nasdaq recording 61 new highs and 353 new lows. The total volume of shares traded on U.S. exchanges was slightly lower than the daily average over the last 20 sessions.
In conclusion, Wall Street experienced significant gains, driven by tech and growth stocks, as Treasury yields stabilized. Investors are now focused on upcoming reports on inflation and other economic data, which will shape interest rate projections. Despite some negative indicators, equities were supported by stable Treasury yields.
