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Stock Market Today: Most Wall Street Stocks Jump in Broad-Based Rally, From Large Caps to Small Caps | KOLR
FILE – Fearless Girl statues face the New York Stock Exchange on July 2, 2024, in New York. (AP Photo/Peter Morgan)
NEW YORK (AP) — A broad-based rally swept Wall Street Friday, sparking sweeping swings to cap a tumultuous week in which stocks that had been sidelined for much of this year’s record-breaking run stole the spotlight from the market’s biggest stars.
The S&P 500 index jumped 1.1%, its best day in seven weeks after 3M and several other major companies reported earnings that beat analysts’ expectations in the spring. The Dow Jones Industrial Average climbed 654 points, or 1.6%, while the Nasdaq Composite rose 1%.
The broad-based market gains came from both Big Tech behemoths and small caps. That’s a change from recent trading, where the gap has widened between the handful of elite stocks that have dominated the market for much of this year and nearly everyone else.
Nvidia rose 0.7%, paring its weekly loss to 4.1%. Most other members of the small group of stocks known as the “Magnificent Seven” also gained, recovering some of their losses from earlier in the week.
The latest earnings reports from Tesla and Alphabet have raised concerns that investors have gotten carried away by their frenzy over artificial intelligence technology and driven the prices of the Magnificent Seven too high. Because of their colossal size, these seven stocks have been the main reason the S&P 500 has hit dozens of all-time highs this year, and they have masked weakness in other market players.
While market-leading technology stocks have fallen, previously weaker sectors of the market have regained strength, and that momentum continued Friday. The small-cap Russell 2000 index climbed 1.7%, bringing its gain for the month to 10.4%. That figure far outpaced the roughly flat performance of the large-cap S&P 500.
Industrial and other companies, whose profits are closely tied to the strength of the economy, also recovered. They had lagged earlier this year under the weight of high interest rates meant to contain inflation.
Norfolk Southern rose 10.9%, erasing a year-ago loss, after the railroad reported a profit in the latest quarter that beat analysts’ expectations. It benefited from insurance payouts related to last year’s disastrous East Palestine derailment. The company also made progress in cutting expenses and improving efficiency.
3M jumped 23% after reporting profit and revenue that beat analysts’ expectations for the latest quarter. The company behind the Scotch-Brite and Nexcare brands also raised the lower end of its full-year 2024 profit forecast range.
Market watchers had hoped for such broad-based gains because a market with many rising stocks is seen as healthier than one driven by a handful of ruling elites.
Stocks broadly benefited from Friday’s latest inflation update, which further boosted investors’ expectations for upcoming interest rate cuts.
U.S. consumers paid 2.5 percent more in June than a year earlier, down from 2.6 percent in May, the Commerce Department said Friday. The figures are based on the personal consumption expenditures index, which the Federal Reserve pays more attention to than the consumer price index.
As inflation resumes its slowdown after a disappointing start to the year, traders are pricing in a 100% chance that the Fed will begin cutting its key interest rate in September, according to data from CME Group. The Fed has kept its benchmark rate at its highest level in more than two decades.
“Income growth is slow, spending growth is moderate, goods prices are deflating, services inflation is moderate,” said Brian Jacobsen, chief economist at Annex Wealth Management. “If that doesn’t give the Fed the confidence to cut rates, nothing will.”
The yield on the 10-year Treasury note fell to 4.19% from 4.25% late Thursday and 4.70% in April. This is a significant development for the bond market and a boost for stock prices.
Among other gainers on Wall Street, where nearly 90% of S&P 500 stocks gained, Deckers Outdoors climbed 6.3% after beating Wall Street earnings expectations on its Ugg and Hoka footwear brands. The California-based company also raised its full-year profit forecast.
Newell Brands jumped 40.5% after the owner of Coleman camping supplies and Sharpie markers easily beat analysts’ profit targets.
Among the few stocks that fell was DexCom, which fell 40.7%. The diabetes care company reported higher-than-expected earnings for the latest quarter, but its revenue missed analysts’ expectations. The same goes for its revenue forecast for the current quarter.
Overall, the S&P 500 rose 59.88 points to 5,459.10. The Dow Jones rose 654.27 points to 40,589.34 and the Nasdaq Composite climbed 176.16 points to 17,357.88.
In overseas stock markets, stock indexes rose in most European and Asian countries. Japan’s Nikkei 225 index was an exception, falling 0.5 percent amid expectations of a possible interest rate hike by the Bank of Japan at a policy meeting next week.
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AP Business reporters Matt Ott and Elaine Kurtenbach contributed to this report.