Stocks racked up more gains on Friday as Wall Street closed their best month since November 2020a welcome reprieve for investors after a punishing year for the market.
The S&P 500 gained 58.05 points, or 1.43%, to 4,130.48 units, while the Nasdaq Composite it rose 225.81 points, or 1.86%, to 12,388.40. The Industry Average Dow Jones it advanced 323.51 points, or 0.99%, to 32,853.14.
The NasdaqThe tech heavyweight ended July with the biggest gains since April 2020. Stocks have gained momentum this month, buoyed by better-than-expected corporate earnings and falling bond yields, which have retreated after soaring much of this year due to expectations of rising interest rates.
Stock gains for the month have been buoyed by better-than-expected corporate earnings reports and by falling bond yields, which have retreated after soaring for much of this year on expectations of rising interest rates.
Weak economic data, including a report on Thursday showing that the US economy contracted last quarter and could enter a recessionhas also propelled stocks higher by giving some investors confidence that the Federal Reserve may reduce its aggressive pace of rate hikes sooner than expected.
The central bank raised its key short-term interest rate in 0.75 percentage points on Wednesday, raising it to the highest level since 2018. The Fed is raising rates in an attempt to slow down the US economy and quell the highest inflation in 40 years.
A gauge of inflation that is closely watched by the Federal Reserve jumped 6.8% in June from a year ago, the biggest increase in four decades, leaving Americans with no relief from soaring prices. In month-on-month terms, inflation accelerated to 1% in Junecompared to a monthly increase of 0.6% in May, the Commerce Department reported on Friday.
The figures underlined the persistence of inflationwhich is eroding Americans’ purchasing power, sapping their confidence in the economy and threatening Democrats in Congress ahead of November’s midterm elections.
Nevertheless, some market watchers cautioned against attaching too much weight to June’s data.
“This inflation metric is for June and we know a lot has changed since thenespecially gasoline prices, so investors should put this inflation report in its historical context,” said Jeffrey Roach, chief economist at LPL Financial. “Looking ahead, July inflation rates will soften somewhat from the previous month as food and energy costs should decline in July”.
Still, inflation weighed on one company in its results on Friday: the consumer staples giant Proctor & Gamble. The actions of the detergent manufacturer Tide they fell 5.3% after the company said consumers were cutting back, but the company’s recent price hikes were keeping up profits.
The results reports of other companies They were more encouraging.
Exxon and Chevron posted record quarterly profits last quarter amid high oil and gas prices. The two companies made $46 billion last quarter, which is about four times the amount of money those two companies made in the same period last year. Chevron shares soared 8.5% to hit a six-week high, while Exxon rose 4.4%.
Amazon rose 12.1% after the company posted a quarterly loss, but its revenue soared in the quarter.
Apple it rose 3.4% after its quarterly earnings were better than Wall Street expected. The iPhone maker saw its profit for the April-June period decline 10% while revenue rose 2% as it grappled with manufacturing problems and inflationary pressures.
In the bond market, returns were mixed. The two-year Treasury yield, which tends to move with Fed expectations, rose to 2.89% from 2.87% on Thursday. The 10-year yield, which influences mortgage rates, fell to 2.64% from 2.67%.
(With information from AP and Reuters)