The Dow Jones Industrial Average rose at the end of the Friday session, by more than 200 points, reaching a new record level above 40 thousand points, at the end of the Friday session, driven by betting that the Federal Reserve (the US Central Bank) would cut interest rates in September, while they declined. Major banks after announcing mixed results.
The index also received support from the gains achieved by Home Depot and Caterpillar, as investors this week began to pay attention to some stocks outside the leading companies range fund of strongly rising technology stocks.
Market update
The Dow added 247.15 points, or 0.62 percent, to close at 40,000.90. During the session, the index of 30 large industrial companies rose to a new record high of 40,257.24 points. This is the first time that the index has exceeded 40,000 points since it crossed this important number in late May. The index achieved weekly gains of about 1.6 percent.
Home Depot added 1.7 percent, bringing its weekly gains to 7.5 percent. Caterpillar added nearly 1.4 percent on the day.
The S&P 500 index rose by 0.55 percent to close at 5,615.35 points, and the Nasdaq Composite index rose by 0.63 percent to close at 18,398.45 points. The two indices achieved weekly gains of about 0.9 percent and 0.25 percent, respectively.
During Thursday's session, the S&P 500 posted its worst performance since late April as investors sold off leading stocks in the Big Tech sector in a major market turnaround, pushing Nvidia stock down 5.6 percent.
However, the 30-company Dow Jones was the best performer on the day, rising slightly by 0.08 percent during sell-offs in other major indexes.
Friday, investors turned to Dow-listed industrial stocks on hopes that slowing inflation will lead to interest rate cuts by the Federal Reserve in September. The Dow rose 1.6 percent for the week. The catalyst was a report released on Thursday showing that the CPI fell 0.1 percent in June.
“The strong growth story in AI has captured a lot of attention, but it is not the only story in the market,” said David Russell, head of global market strategy at TradeStation, adding, “This week’s comments from Federal Reserve Chair Jerome Powell and the CPI report.” They remind investors that there are other catalysts that can boost other types of companies and this is especially true for a sector such as utilities, which could now benefit from lower interest rates,” according to CNBC Global.
Bank performance is lackluster
JPMorgan shares fell 1.2 percent even as the bank posted second-quarter revenue above Wall Street expectations due to a jump in investment banking fees. Citibank shares fell by 1.8 percent despite achieving results higher than expectations in both revenues and profits in the second quarter.
Wells Fargo shares fell 6 percent after the bank reported that net interest income, a key measure of banks' lending yield, fell below expectations in the second quarter.
The wholesale inflation (Producer Price Index) reading came in slightly hotter than expected Friday, but Wall Street largely ignored those numbers after the all-important consumer price report Thursday showed inflation slowing.
Nvidia stock rose 1.4 percent Friday as investors couldn't resist some of their favorite technology names that were sold off the day before.
The S&P 500 has gained nearly 18 percent for the year, much of it thanks to a rise in technology stocks. The technology sector jumped 33 percent in 2024, and the communications services sector rose 26 percent.
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