The US stock market experienced a surge on Friday, driven by optimism stemming from comments made by Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Symposium. Powell hinted at an upcoming shift in interest rates, stating, “The time has come for policy to adjust.” His remarks suggest the Fed is on the verge of easing interest rates, although Powell emphasized the importance of data-driven decisions, avoiding any definitive commitment to specific timing or the magnitude of these cuts.
Tech stocks particularly benefited from the prospect of a lower interest rate environment, recording significant gains. Tesla and NVIDIA shares soared over 4.5% each on Friday. Workday, Inc., a cloud-based software provider, witnessed a remarkable 12.5% jump in its stock price following the release of upbeat earnings for the second quarter. Ross Stores, Inc. also reported strong second-quarter earnings, exceeding market expectations.
On the economic data front, Baker Hughes Inc. reported that the total number of active US oil rigs remained unchanged this week at 483. All sectors within the S&P 500 closed in the green, with consumer discretionary, information technology, and real estate stocks leading the charge. The Dow Jones Industrial Average gained approximately 462 points, closing at 41,175.08. The S&P 500 rose by 1.15%, settling at 5,634.61, while the Nasdaq Composite climbed 1.47%, ending the session at 17,877.79.
Investors are eagerly awaiting earnings results from HEICO Corporation, Daqo New Energy Corp., and Trip.com Group Limited today.
The CNN Money Fear & Greed Index, a measure of market sentiment, remained in the ‘Neutral’ zone on Friday, with a reading of 52.9, slightly higher than the previous reading of 48.4. This index is based on the assumption that heightened fear exerts downward pressure on stock prices, while increased greed has the opposite effect. The index is calculated using seven equally weighted indicators and ranges from 0 to 100, with 0 representing maximum fear and 100 signaling maximum greed.
