US stocks rebounded on Friday, aiming to recover from the Dow’s largest drop in over a year. The S&P 500 rose by 0.3%, the Nasdaq Composite gained a similar amount, and the Dow Jones Industrial Average increased by 0.1% or around 50 points.
Concerns about interest rates resurfaced on Thursday, leading to a sell-off, particularly with the Dow plummeting by over 600 points. US Treasury yields also rose, with the 10-year yield hovering close to 4.5%.
The market sentiment shifted after strong US business data prompted a reassessment of the Federal Reserve’s stance on interest rates. Traders are divided on whether the central bank will cut rates at its September meeting, which is a change from previous expectations. Goldman Sachs now predicts that the Fed’s first rate cut will likely happen in September, as opposed to July.
Despite the recent turmoil, Nvidia saw a slight increase in its stock price on Friday. The company’s upcoming stock split may attract more retail investors.
In economic news, the revised University of Michigan consumer sentiment index for May was closely watched. The initial reading showed a decline in the index, attributed to concerns about inflation and interest rates impacting Americans’ economic outlook.
Overall, the stock market showed signs of recovery on Friday, with investors cautiously optimistic about the future direction of interest rates and the economy.