The Dow Jones Industrial Average Index reached new record highs above 40,000 on Friday, breaking the previous peak set in May. Small caps also saw a rally, driven by bets on interest rate cuts, with the Russell 2000 Index gaining over 6% for the week.
All eleven S&P 500 sectors showed gains, with the index of the 500 largest U.S. corporations rising by 0.9%. The Nasdaq 100 rebounded by 1% after a 2.2% selloff the previous day.
Producer inflation rose more than expected in June, but expectations for rate cuts remain strong, with traders anticipating a cut in September. The consumer sentiment index indicated weakness in July, along with a decrease in future inflation expectations.
Major banks like JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co. reported better-than-expected earnings, but market reactions were negative, especially for Wells Fargo due to a weakening outlook on net interest income.
Treasury yields remained steady, with the 10-year yield at 4.20%, on track for the lowest close since late March. The dollar weakened for the second consecutive week.
In commodities markets, gold edged up 0.1% for its fourth straight session of gains, while natural gas spiked 3% and oil prices softened by 0.2%. Bitcoin rose by 1.3% in the cryptocurrency market, trading above $58,000.
Stock movers on Friday included EV-related stocks like Lucid Group Inc., Rivian Automotive Inc., and Tesla Inc., which rallied amid strong expectations for Q2 deliveries. Bank of New York Mellon Corp. rose over 5%, QuantumScape Corp. rallied 18%, and Carvana Co. rose over 8% after various announcements and earnings reports.
Overall, it was a positive day for major U.S. indices and ETFs, with notable performances from various sectors. The market continues to show resilience and momentum despite ongoing economic uncertainties.