Despite a tumultuous week on Wall Street, the stock market managed to finish higher overall, with the Dow Jones Industrial Average leading the way with a nearly 1.6% gain. The S & P 500 and Nasdaq also saw gains of almost 1% and 0.25%, respectively, closing around record highs.
The week started off strong, with favorable inflation data prompting investors to scoop up economic- and rate-sensitive stocks that have not performed as well this year. However, Thursday saw a brutal rotation out of tech stocks, with the Nasdaq taking a hit of nearly 2% on the session. Despite this setback, the Nasdaq was able to finish the week in the green, a remarkable feat given the tech-led selling.
Investors reacted to the cooler June consumer price index by broadening their portfolios with stocks that would benefit from lower borrowing costs. Market odds were still favoring as many as three Federal Reserve rate cuts this year, according to the CME FedWatch tool.
Three Club rate plays – solar panel company Nextracker, Stanley Black & Decker, and Ford – were the top-performing stocks for the week. The start of the second quarter earnings season also brought some notable reports, including Wells Fargo, which saw a sell-off post-earnings but was later upgraded back to a buy-equivalent rating.
Looking ahead, the market will be driven by earnings and economic data in the coming week. Key reports include June retail sales, housing starts and building permits, and industrial production and capacity utilization data. Earnings reports from companies like Morgan Stanley and Abbott Laboratories will also be closely watched.
Despite the ups and downs of the market, investors remain optimistic about the overall outlook, with many looking for continued momentum in various sectors. As always, it’s important for investors to stay informed and be prepared for any potential market shifts.
