U.S. stocks rebounded sharply on Friday, led by a 509-point jump in the Dow Jones Industrial Average, as easing oil prices and an inflation report matching expectations calmed investor nerves following a volatile week across global financial markets.
Wall Street managed a broad recovery at the end of the week, halting a four-day losing streak that had marked the S&P 500’s longest downward run since June. The S&P 500 climbed 0.9 percent, while the tech-heavy Nasdaq composite advanced 1 percent. The Dow Jones Industrial Average led the major indexes higher, jumping 509 points, or 1 percent.
The reversal came after oil prices eased off their recent spurt, offering welcome relief to equity investors tracking the economic fallout of ongoing hostilities with Iran. The price for a barrel of Brent crude, the international standard, fell 2.8 percent to settle at $104.61 after getting near $110 overnight.
GIFT Nifty jumped 100 points on Friday morning, indicating a firm start for Indian equity benchmarks Sensex and Nifty, aided by the sharp Wall Street rally, positive Asian cues and easing US Fed rate-hike expectations. GIFT Nifty was trading at 24,033 around 7:45 am, up 100 points or 0.42 percent. Indian markets gave up early gains in the previous session as selling in auto, IT and pharma stocks outweighed strength in media, realty and banking names. The Sensex fell 417.49 points, or 0.55 percent, to 76,152.86, while the Nifty declined 41 points, or 0.17 percent, to 23,873.45. Indian markets were expected to open higher following US Fed comments that eased rate hike fears and boosted global markets, though crude oil near $96 a barrel and US-Iran tensions limited gains.
US stocks jump after oil prices ease and an
Asian equities were mostly higher on Friday as the pullback in global bond yields and reduced expectations of an imminent US Fed rate hike supported risk appetite. MSCI’s Asia-Pacific equities gauge gained 0.3 percent, led by technology stocks in South Korea. Hang Seng futures advanced 1.1 percent, while Australia’s S&P/ASX 200 edged up 0.1 percent. Japan’s Topix, however, slipped 0.2 percent.
S&P 500 futures were little changed following the strong overnight gains on Wall Street. US stocks rallied on Thursday after Fed Governor Christopher Waller said he would support keeping interest rates unchanged if inflationary pressures continued to ease. Following Waller’s remarks, markets lowered the probability of a September Fed rate increase to 50.4 percent from 63.2 percent on Wednesday, according to CME’s FedWatch tool, Reuters reported. The Nasdaq Composite jumped 1.40 percent to 26,584.06, helped by gains in AI-related megacap technology stocks. The Dow Jones Industrial Average climbed 1.18 percent to 53,686.11, while the S&P 500 advanced 1.06 percent to 7,747.71.
Crude oil remains a major headwind despite the improved equity-market backdrop. Brent crude edged 0.3 percent higher to $95.76 a barrel on Friday and was up more than 7 percent for the week, putting it on course for its biggest weekly gain since July. West Texas Intermediate rose 0.4 percent to $91.65 a barrel. Oil prices have surged as renewed hostilities between the US and Iran heightened concerns about prolonged disruptions to energy flows through the Strait of Hormuz. The escalation followed a period of relative calm, with a fresh US bombing campaign earlier this week drawing retaliation against American bases in the region.
Inflation Data Meets Expectations as Federal Reserve Meeting Nears
GIFT Nifty jumps 100 pts, signals strong start for
The market’s stabilization was further supported by a U.S. consumer price report showing living costs for gasoline, food and other costs of living were 3.4 percent higher last month than a year earlier. While still high, the reading was close to what economists expected and what Wall Street was prepared for.
Traders interpreted the data as strengthening expectations that the Federal Reserve will feel compelled to hike its main interest rate at its meeting next week. Such moves are the typical way the Fed tries to rein in high inflation, and they work by filtering through the bond market, making it more expensive for everyone to borrow money, slowing the economy and hopefully removing fuel for further inflation. This anticipation drove the yield on the two-year Treasury—which moves with guesses for upcoming Fed action—to 4.62 percent from 4.56 percent late Thursday. Longer-term Treasury yields held steadier, though. That could be a signal that investors in the bond market see upcoming hikes by the Fed as helping to keep control of inflation over the longer term. The yield on the 10-year Treasury rose more modestly to 4.97 percent from 4.95 percent late Thursday, while the 30-year yield eased to 5.36 percent from 5.37 percent.
Economists say hikes could quiet questions about the Fed’s commitment to keeping inflation under control. Worries had risen earlier in the summer about its credibility and whether it would do what’s needed to bring inflation down, even if it causes pain for the economy in the near term. Federal Reserve Chairman Kevin Warsh has been adamant about not giving hints about where the Fed may take interest rates, though he did calm some concerns among investors at a speech late last month. President Donald Trump, meanwhile, has been pushing for interest rates to go lower rather than higher.
"Symbolism can trump substance, even when it comes to monetary policy," according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Wall Street rises as oil prices ease slightly
Corporate Earnings Drive Individual Stocks
Corporate developments generated notable individual stock movements on Wall Street alongside the macroeconomic trends. On Wall Street, Kroger rose 2.7 percent after the grocer reported a stronger profit for the latest quarter than analysts expected. It also held firm o
Consumer Confidence Slips Amid Persistent Cost Pressures
It’s all coming at a moment when confidence among Americans continues to sour. A preliminary report from the University of Michigan on Friday said U.S. consumer sentiment is falling, with declines for both Democrats and Republicans.
More troubling for central bankers, their expectations for inflation coming in the year ahead jumped to 4.6 percent from 4 percent last month. That’s the highest reading since June, and it’s concerning for the Fed and for economists because it can trigger a vicious cycle of behavior that worsens inflation.
