NEW YORK (AP) — U.S. stocks rebounded higher on Friday after Wall Street’s worst day since April.
The S&P 500 rose 36.88 points, or 0.7%, to 5,304.72, clawing back all of the losses from the previous two days, and is up only slightly this week, extending its weekly gain to five and remaining just below the record high recorded on Tuesday.
The Dow Jones Industrial Average rose 4.33 points, or less than 0.1 percent, to 39,069.59, while the Nasdaq Composite rose 184.76 points, or 1.1 percent, to 16,920.79, surpassing the all-time high it set earlier this week.
Deckers Outdoor Co. reported better-than-expected profits and revenues for its latest quarter, rising 14.2% to become the biggest gainer in the S&P 500. The company, which owns the Hoka, Ugg and Teva brands, also gave earnings guidance for next year that was in line with analysts’ expectations.
Ross Stores Inc. also boosted the market, soaring 7.8% after the company reported profits for its latest quarter that beat analysts’ expectations. Revenue was only slightly ahead of expectations as customers continue to cut back on non-essential purchases, but profits still rose.
“Several challenges, including persistent inflation, continue to weigh on the purchasing power of our low- to moderate-income customers,” CEO Barbara Rentler said in a statement.
While aggregate, or macroeconomic, data points to strength in U.S. household spending, the numbers below the surface are It may not be so encouraging.
“Walmart and Target are saying that higher-income consumers are doing well, but they’re starting to shop less,” said Brian Jacobsen, chief economist at Annex Wealth Management. “Lower-income consumers are struggling. Macroeconomics is often too focused on averages, and the averages are skewed by higher-income households.”
On Friday, markets rose slightly on a report that overall sentiment among U.S. consumers in May was not as weak as preliminary data had suggested. Perhaps more importantly, the University of Michigan report also said that U.S. consumers’ inflation expectations for the year ahead did not rise as much in May as initially feared.
Doing so could help stave off a vicious cycle in which American households’ inflation expectations rise and they take actions that only make inflation worse.
The volatile trading this week was driven by concerns over stubbornly high inflation after the index rose. Recent RecordsIt began with the cut in interest rates announced by the Federal Reserve on Wednesday. Minutes of the last policy meetingIt indicated some officials were talking about the possibility of raising interest rates if inflation worsens.
Stock prices fell further. Thursday Report This shows that the US economy is doing better than expected. strength That could really scare Wall Street, as upward pressure on inflation could continue.
That would at least delay the Federal Reserve’s decision to cut its key interest rate, which is at its highest in more than two decades, to rescue financial markets as it tries to navigate the tricky task of keeping inflation at bay while slowing the economy enough not to crush the job market.
Goldman Sachs economist David Mericle pushed back his forecast for the Fed’s first interest rate cut from July to September, following Thursday’s reports on U.S. business activity and the unemployment rate.
Those concerns sent Treasury yields higher this week but were roughly flat on Friday following the report on consumer sentiment. The 10-year Treasury yield fell to 4.46% from 4.48% late Thursday. The 2-year yield, which better reflects expectations of Fed action, was flat at 4.94%.
This week’s stock market volatility is due to another Nvidia reports astounding profitsNvidia has soared to become one of Wall Street’s most powerful stocks amid a frenzy over artificial intelligence technology. While the frenzy over AI has driven some stocks to heights that critics say are overdone, Nvidia Impressive growth And further projections suggest that this is likely to continue.
Nvidia rose another 2.6% on Friday, making it the biggest driver of the S&P 500’s gains.
Meanwhile, on Wall Street, Workday shares fell 15.3% despite reporting profits for its latest quarter that beat analysts’ expectations. The company, which helps businesses manage their people and finances, gave a forecast for future subscription revenue that was slightly below Wall Street expectations.
Overseas stock indexes in many Asian and European countries fell, with Hong Kong down 1.4%, Seoul down 1.3% and Tokyo down 1.2%.
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AP Business Writers Matt Ott and Elaine Kurtenbach contributed.
