After ending yesterday’s lackluster session mostly lower, stocks have moved back to the upside during trading on Friday. The major averages have all climbed firmly into positive territory, with the tech-heavy Nasdaq showing a notable rebound.
Currently, the major averages are just off their highs of the session. The Nasdaq is up 278.34 points or 1.4 percent at 19,616.63, the S&P 500 is up 59.89 points or 1.0 percent at 5,997.23 and the Dow is up 376.03 points or 0.9 percent at 43,529.16.
Stocks may be benefitting from a continued decrease by treasury yields, as the yield on the benchmark ten-year note is moving lower for the fourth straight day after reaching its highest closing level in over a year on Monday.
The recent retreat by treasury yields comes as the U.S. inflation data released over the past few days has led to renewed optimism about the outlook for interest rates.
Adding to the interest rate optimism, Federal Reserve Governor Christopher Waller told CNBC the central bank could lower interest rates multiple times this year if inflation eases as he is expecting.
“As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” Waller said during an interview with Sara Eisen on CNBC’s “Squawk on the Street” on Thursday.
Waller said the number of rate cuts would be driven by the data, suggesting the Fed could cut rates three or four times if there is a lot of progress on inflation or cut rates twice or only once if inflation remains sticky.
The strength on Wall Street may also reflect optimism about the outlook for the markets under President-elect Donald Trump, who is due to be sworn in for the second time on Monday.
Stocks surged in reaction to Trump’s election in November amid expectations of more pro-business policies in the new administration, although there are also concerns about impact of proposed tariffs.
In U.S. economic news, the Federal Reserve released a report showing industrial production increased by much more than expected in the month of December.
The Fed said industrial production jumped by 0.9 percent in December after rising by a revised 0.2 percent in November.
Economists had expected industrial production to climb by 0.3 percent compared to the 0.1 percent dip originally reported for the previous month.
Sector News
Semiconductor stocks are turning in some of the market’s best performances on the day, driving the Philadelphia Semiconductor Index up by 2.4 percent.
Applied Materials (AMAT) is posting a notable gain after KeyBanc Capital Markets upgraded its rating on the company’s stock to Overweight from Sector Weight.
Considerable strength is also visible among steel stocks, with the NYSE Arca Steel Index climbing by 1.3 percent to its best intraday level in a month.
Retail, software and brokerage stocks are also seeing notable strength on the day, while pharmaceutical stocks have moved to the downside.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan’s Nikkei 225 Index fell by 0.3 percent, while China’s Shanghai Composite Index crept up by 0.2 percent.
Meanwhile, the major European markets have all shown strong moves to the upside on the day. While the U.K.’s FTSE 100 Index is up by 1.6 percent, the French CAC 40 Index and the German DAX Index are both up by 1.1 percent.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price is down by less than a basis point at 4.599 percent after hitting a low of 4.568 percent.
Business News
U.S. Stocks Showing Strong Move Back To The Upside
2025-01-17 15:47:36
