Nasdaq, S&P 500 reach record highs

Stock indexes on Wall Street ended higher on Friday, with the technology-heavy Nasdaq and the benchmark S&P 500 hitting record highs, while new data showing weakness in the U.S. labor market boosted expectations for interest rate cuts as early as September, News.Az reported, citing Reuters.

The gains were led by large-cap stocks such as Microsoft, which rose almost 1.5% to close the day at a record high.

Meta Platforms also hit its highest closing level on record, gaining about 5.9%, pushing the information technology sector to a record high.

The best-performing sector was the S&P 500 communication services sector, reaching its highest level since 2000.

The Dow Jones Industrial Average rose 67.87 points, or 0.17%, to 39,375.87.

The S&P 500 index gained 30.17 points, or 0.54%, to 5,567.19, and the Nasdaq Composite index added 164.46 points, or 0.90%, to 18,352.76.

This week, the S&P 500 is up 1.95%, the Nasdaq is up 3.5%, and the Dow Jones is up 0.66%.

Labor Department data showed U.S. job growth slowed slightly in June, with the unemployment rate rising to its highest level in more than 2 1/2 years. At the same time, wage growth slowed.

Investors expect the data could spark a more active debate on rate cuts when the Federal Reserve meets later this month. The odds of the U.S. central bank easing policy in September have risen to 79% from 66% seen before the data, CME’s FedWatch tool showed.

“This report puts the Fed in a comfortable position,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

“If that continues next month, with no hourly rate increases, I think we’ll see a rate cut in September and another in December.”

Data released earlier this week also showed the U.S. economy was losing momentum, helping the S&P 500 and Nasdaq reach record closing highs in a holiday-shortened session on Wednesday.

“We are in a stagflation-like environment – ​​economic growth is slowing, inflation is flat for now,” said Alex McGrath, chief investment officer at NorthEnd Private Wealth.

He added that the situation is not favourable for small-cap companies, which are sensitive to changes in interest rates, while large-cap companies are recording high profits, which is contributing to the growing strength of the market.

The Russell 2000 small-cap index fell 0.95% for the week.

Shares of big banks fell ahead of second-quarter corporate earnings reports due next Friday.

Higher interest rates and economic uncertainty are weighing on the performance of U.S. banks.

Shares of Bank of America, Wells Fargo and JPMorgan & Chase fell 1.2% to 1.7%, dragging the S&P 500 banking index down 1.6%.

Macy’s shares rose 9.5% on Friday after a report said Arkhouse Management and Brigade Capital had raised their offer to buy the department store chain for about $6.9 billion.

On the NYSE, advancing stocks outnumbered declining stocks by a ratio of 1.04 to 1. On the Nasdaq, declining stocks outnumbered advancing stocks by a ratio of 1.05 to 1.

The S&P 500 Index posted 19 new 52-week highs and eight new lows, while the Nasdaq Composite Index posted 46 new highs and 162 new lows.

Trading volume on US exchanges amounted to 9.73 billion shares, while the average for the full session over the last 20 trading days was 11.57 billion.

News.Az