U.S. stocks jumped on Friday, as major indexes snapped a multi-week losing streak, after a string of more upbeat corporate results at least temporarily offset fears of a sharp economic downturn.
The S&P 500 closed up 2.5% at 4,158.24. The blue-chip index snapped a seven-week losing streak for its best week since November 2020, rising more than 6.5% since Friday. So far, the S&P 500 has also recovered its May losses.
The Dow Jones Industrial Average rose 576 points, or 1.8%, to close at 33,212.96 on Friday, while the Nasdaq Composite rose more than 3% to 12,131.13.
Investors digested a fresh set of economic data early Friday, including Core Personal Consumption Expenditure (PCE) — The Fed’s preferred measure of underlying inflation. The data suggest that inflation pressures eased only marginally in April compared to March, echoing March’s results. Consumer price index remains high Producer Price Index released earlier this month. Overall PCE increased 6.3% in April compared to 6.6% a year earlier, while core PCE increased 4.9% compared to 5.2% a month earlier. But separate data also showed that personal spending, adjusted for inflation, accelerated in April from March.
Over the past few sessions, investors have been bullish on the latest batch of quarterly results and guidance from retailers such as Macy’s.Meter), Nordstrom (JWN), Dollar General (dangerous goods) and Dollar Tree (DLTR). The companies have largely beat Wall Street estimates, helping to ease concerns about pressure on Walmart’s recently reported profit (WMT), Target(TGT) and Cole’s (KSS) had the same repercussions in all consumer-facing companies. Outside of retail, airlines including JetBlue Airways (JBLU) and Southwest (UV) raised its sales guidance for the quarter, signaling that demand for discretionary travel remains strong.
“Overall, the U.S. consumer is still holding up well. They’re caught in these price hikes, this inflation, and that provides a buffer on the balance sheet. Employment is definitely high, so the U.S. consumer overall is still in a very strong position. position,” Brent Schutter, chief investment officer at Northwest Mutual Wealth Management, told Yahoo Finance Live.
“The biggest concern is that inflation will continue to get out of hand, causing the Fed to have to tighten the U.S. economy into recession,” he added. “I think we’re all starting to realize the reality of spending on goods … being pushed forward. Inventories have been rebuilt and spending on goods is causing the inflation you’re seeing. As people move to spending on services.”
“So in some areas of the economy it might feel like a recession, but other areas of the economy will do well,” Schutter said. “Inflation will come down and the Fed will be accommodative.”
However, other strategists have cast doubt on the staying power of the market’s gains so far this week, especially with inflation showing few meaningful signs of a sharp decline so far.
“In our view, it’s just a bear market rally. When you look at these rallies that we’ve been through, they’ve been very light volume and not a lot of conviction,” said co-founder and managing partner Eddie Ghabour principal. advisory group, Tell Yahoo Finance Live. “The data we’re getting now that’s causing the sell-off, remember, it’s the first quarter. The second quarter is going to be worse than the first. And we won’t get until July…so I think the next few We’re going to have a very dangerous market in the next month.”
4:03 p.m. ET: Stocks post best week since November 2020 as S&P 500 erases May losses
Here’s where the market closed on Friday:
S&P 500 (^GSPC): +100.43 (+2.47%) to 4,158.27
road (^DJI): +576.36 (+1.77%) to 33,213.55
Nasdaq (^IXIC): +390.48 (+3.33%) to 12,131.13
thick(CL=F): +$1.01 (+0.89%) to $115.10 per barrel
gold (GC=F): +$3.40 (+0.18%) to $1,857.30 per ounce
10-year Treasury note (^TNX): -1.3 basis points, yield 2.7430%
11:54 a.m. ET: Stocks extend gains near session highs, Dow gains for sixth straight day
Here are the key moves in the market as of 11:54AM ET:
S&P 500 (^GSPC): +72.05 (+1.78%) to 4,129.89
road (^DJI): +344.28 (+1.05%) to 32,981.47
Nasdaq (^IXIC): +299.88 (+2.55%) to 12,040.53
thick(CL=F): +$0.12 (+0.11%) to $114.21 per barrel
gold (GC=F): +$4.50 (+0.24%) to $1,858.40 per ounce
10-year Treasury note (^TNX): -2.7 basis points, yield 2.7290%
10:06 a.m. ET: Consumer confidence weakens in late May to lowest since 2011
Consumer confidence fell further in late May, largely due to concerns about recent inflation and business conditions.
The University of Michigan’s final monthly sentiment index fell to 58.4, a downward revision from the previously reported 59.1. Sub-indexes that track consumers’ views on current conditions and future expectations were also revised down slightly, with one-year inflation expectations barely changing at 5.3%.
The latest drop in sentiment “is largely due to continued negative perceptions of current housing and durable goods buying conditions and consumers’ continued negative outlook for the economy’s future prospects, mainly due to inflation concerns,” said Joanne Hsu, director of consumer surveys, wrote in a statement. “At the same time, consumers are less pessimistic about their personal financial prospects than they are about future business conditions.”
“Longer term, most consumers expect their financial situation to improve over the next five years; this percentage will remain largely unchanged in 2022,” Hsu added. “The stable outlook for personal finances is likely to support consumer spending for now. However, persistently negative views of the economy are likely to dominate the personal factors influencing future consumer behavior.”
9:32 a.m. ET: Stocks open higher
Here are the main moves in the market as of 9:32AM ET:
S&P 500 (^GSPC): +32.86 (+0.81%) to 4,090.70
road (^DJI): +56.27 (+0.17%) to 32,693.46
Nasdaq (^IXIC): +165.04 (+1.41%) to 11,905.69
thick(CL=F): -$0.12 (-0.11%) to $113.97/barrel
gold (GC=F): +$10.30 (+0.56%) to $1,864.20 per ounce
10-year Treasury note (^TNX): -3.1 bps yield is 2.7250%
8:58 a.m. ET: The goods trade deficit narrowed more than expected in April after March’s record reading
U.S. merchandise trade deficit April drop more than expected After reaching an all-time high of nearly $126 billion in March.
The U.S. Commerce Department said on Friday that the U.S. advance goods trade balance for April showed a reading of $105.9. Before that, the gap in March was $125.9 billion, revised up from $125.3 billion the previous month.
Data showed that trade was a slightly smaller drag on the U.S. economy early in the second quarter than in the first quarter. In the first quarter, Net exports reduce US GDP by 3.23 percentage points (gross domestic product). In the first three months of the year, GDP fell at an annual rate of 1.5%.
8:42AM ET: Real personal spending accelerated in April, while savings rate fell to lowest level since 2008
U.S. consumers continued to spend last month, even as inflation remained high as one of the main contributors to U.S. economic activity continued into the spring. However, the personal savings rate fell to its lowest level in more than a decade, raising concerns about how long spending can support the economy.
The Economic Bureau said on Friday that real personal spending rose 0.7% in April from the previous month, up from a 0.2% increase in March. Unadjusted for inflation, personal spending rose 0.9%, beating economists’ consensus estimate of 0.8%, Bloomberg data showed. The indicator rose 1.1% in March.
However, personal income slowed slightly last month, rising 0.4% after rising 0.5% in March. The personal savings rate, or the share of personal disposable income that is used to save, fell to 4.4% from 5.0% in March, the lowest level since 2008. After surging during the pandemic, the savings rate is now well below the average of more than 7% in 2019, before the pandemic.
8:38am ET: Inflation eased slightly in April as PCE rose 6.3% year over year
Inflation, as measured by the Bureau of Economic Analysis’s Personal Consumption Expenditure (PCE) index, fell only slightly in April compared with March, while rapidly rising prices showed little sign of a slowdown in the broader U.S. economy.
The broadest measure of PCE rose 0.2% in April from a month earlier, in line with economists’ consensus forecast, according to Bloomberg data. That compares with a monthly increase of 0.9% in March. However, on a year-over-year basis, PCE still surged 6.3%, slightly more than expected and only a slight slowdown from March’s 6.6% annual gain.
Core PCE, which strips out volatile food and energy prices, also remained high, rising 4.9% in April from a year earlier. This was in line with expectations and rose 5.2% in March. The February reading was 5.3%, the highest level since 1983.
7:23 a.m. ET: Stocks rise, indexes on track for weekly gains
This is where the market trades on Friday morning:
S&P 500 futures (ES=F): +11 points (+0.27%) to 4,066.75
Dow futures (YM=F): +26 points (+0.08%) to 32,626.00
Nasdaq Futures (NQ=F): +54.25 points (+0.44%) to 12,333.50
thick(CL=F): -$0.46 (-0.40%) to $113.63
gold (GC=F): +$8.80 (+0.47%) to $1,862.70 per ounce
10-year Treasury note (^TNX): -3.3 basis points, yielding 2.725%
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.