Wall Street experienced a widespread rally on Friday, with stocks across various sectors seeing significant gains. The S&P 500 had its best day in seven weeks, jumping 1.1%, while the Dow Jones Industrial Average soared 654 points, or 1.6%. The Nasdaq composite also climbed 1%.
The rally was fueled by better-than-expected profit reports from companies like 3M, which saw a 23% leap in its stock price after reporting strong earnings. This marked a shift from the dominance of Big Tech stocks that had been driving the market for much of the year.
As the market’s biggest stars faltered, smaller stocks and industrial companies saw a resurgence. The Russell 2000 index of smaller stocks climbed 1.7%, outperforming the larger stocks in the S&P 500.
Investors were also buoyed by the latest update on inflation, which showed a slowdown in price growth. This further solidified expectations for interest rate cuts by the Federal Reserve, with traders now betting on a 100% probability of a rate cut in September.
The positive news on inflation also led to a drop in the yield on the 10-year Treasury, offering support for stock prices. Nearly 90% of the stocks in the S&P 500 rose on Friday, with companies like Deckers Outdoors and Newell Brands seeing significant gains.
Overall, the S&P 500 rose 59.88 points to 5,459.10, the Dow rallied 654.27 to 40,589.34, and the Nasdaq composite climbed 176.16 to 17,357.88. Stock markets abroad also saw gains, with stock indexes higher across much of Europe and Asia.
The rally on Wall Street on Friday marked a shift in market dynamics, with a broadening of gains seen as a positive sign for the health of the market. Investors will be closely watching for further developments as they anticipate potential interest rate cuts by the Federal Reserve in the coming months.
