U.S. stocks closed sharply higher Friday as the tech sector recovered, earnings news gave a big boost to several companies and inflation data reinforced expectations that the Federal Reserve will cut interest rates soon.
The Dow Jones Industrial Average added 1.6%, a 654-point gain, while the S&P 500 and Nasdaq Composite gained 1.1% and 1.0%, respectively. The S&P 500 and Nasdaq snapped three-session losing streaks, but still finished lower for the week, while the Dow posted a slight weekly gain.
Investors reacted positively to news early Friday that the Federal Reserve’s preferred measure of inflation showed that price pressures moderated in June. Fed officials have said they are looking for further evidence that inflation is under control before it starts cutting its benchmark interest rate, and Friday’s data helped solidify the expectation that the central bank will do so by September.
Among the mega-cap stocks on the move Friday, chipmaker Nvidia (NVDA), Apple (AAPL) Microsoft (MSFT) Meta Platforms (META) and Amazon (AMZN) all higher gained ground. Shares of chipmakers were also broadly higher, with the iShares Semiconductor ETF (SOXX) gaining 2.1%.
Tech stocks, which have led the market’s strong performance for most of the year, have lost ground recently as investors rotate into small-cap stocks that stand to benefit most from the expected rate cuts by the Fed. The Russell 2000 small-cap index rose 1.7% Friday and gained more than 3% for the week.
The big mover on the Dow Friday was conglomerate 3M (MMM), which rose 23% after reporting strong earnings and boosting guidance. Other post-earnings gainers included Hoka-maker Deckers (DECK), Charter Communications (CHTR), and Bristol-Myers Squibb (BMY). The big decliner was medical devices company Dexcom (DXCM), which fell 40% after reporting weak earnings and slashing guidance.
Gabby Jones / Bloomberg / Getty Images
Bitcoin surged to near $68,000 ahead of a speech that former President Donald Trump, the Republican nominee in the 2024 presidential election, will make at a crypto conference over the weekend. Crypto-related stocks also moved higher Friday.
The yield on the 10-year Treasury, which is sensitive to expectations about possible rate cuts, fell to 4.19% from 4.24% on Thursday. Gold futures were up about 1%, while crude oil was down about 2%.
S&P 500 Top Movers on Friday
38 minutes ago
Advancers
- In addition to notching the top performance among the 30 components of the Dow, 3M shares led the way for the S&P 500, skyrocketing 23.0% to reach their highest level since 2022. The leap higher for the stock came after the maker of Scotch tape, Scotch-Brite, and other well-known brands reported better-than-expected second-quarter profit and sales while boosting its forecasts for the full year. CEO William Brown, who took the reigns of 3M at the beginning of May, said the conglomerate is focused on organic revenue growth following the settlement of class-action lawsuits and the spinoff of its health care unit Solventum (SOLV).
- Shares of Mohawk Industries (MHK) soared 19.5% after the residential and commercial flooring manufacturer beat earnings per share (EPS) forecasts for the second quarter and guided third-quarter earnings above consensus estimates. Following the strong quarterly results, Bank of America upgraded Mohawk stock from “underperform” to “buy” while significantly hiking its price target. Analysts expressed confidence in Mohawk’s ability to continue expanding its margins even as it navigates a difficult macroeconomic environment.
- Cable and internet provider Charter Communications (CHTR) also outperformed top- and bottom-line expectations in its second-quarter earnings release, and its shares jumped 16.6%. Although Charter reported a decline in broadband subscribers amid stiff competition, the company achieved growth in rural markets, driven by its expansion in mobile phones as well as government programs aiming to improve internet access in more remote areas.
Decliners
- Dexcom (DXCM) shares suffered the steepest losses of any S&P 500 stock, plummeting 40.7% after the maker of glucose monitoring devices for patients managing diabetes missed second-quarter revenue estimates and cut its sales guidance for the current quarter and the full year. According to the company, a reshuffling of its sales team, slower-than-expected new customer additions and lower revenue per user contributed to the weak results and a more restrained outlook.
- Biogen (BIIB) shares sank 7.2% after regulators in Europe rejected the Alzheimer’s treatment Leqembi developed by the biotechnology firm in coordination with Japan-based pharmaceutical company Eisai (ESAIY). Although the U.S. Food and Drug Administration (FDA) approved Leqembi last year, the European Medicines Agency’s human medicines committee did not recommend granting marketing authorization for the drug, arguing that the risk of serious side effects outweighs the treatment’s potential benefits. Eisai’s American depositary receipts (ADRs) dropped 12.9% on the day.
- Shares of aerospace and defense contractor L3Harris Technologies (LHX) fell 5.7%. Although the company beat second-quarter profit estimates and boosted its full-year guidance, citing strong weapons demand amid elevated global tensions, Deutsche Bank downgraded the stock to “hold,” pointing to a high valuation following year-to-date gains heading into Friday’s session.
What the Dotcom Bubble Tells Us About Market Today
2 hr 33 min ago
There’s reason to believe history is repeating itself, according to a recent Deutsche Bank note that draws parallels between the current rotation out of tech mega-caps and the bursting of the tech bubble in 2000.
In the 9 months after the bubble reached its peak in March 2000, tech stocks fell more than 50%. The Consumer Staples, Utilities, and Healthcare sectors, meanwhile, each rose by more than 35%.
Deutsche Bank
Research analyst Jim Reid sees similarities between that moment and the current sector rotation out of big tech stocks. The Magnificent Seven shed about 12% of their value between July 10 and Thursday, though they’re recovering some of those losses in today’s session. The S&P 500 lost nearly 4% in the same period. However, 7 of 10 sectors within the index rose over the period, led by utilities and healthcare, much like in 2000.
Read the full story here.
AI Chip Stock Rally Returns
4 hr 14 min ago
Shares of Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and other chipmakers were on the rise Friday, rebounding from recent losses, as analysts said the torrid rise in chip stocks this year on surging demand for artificial intelligence is likely nowhere near its peak.
The iShares Semiconductor ETF (SOXX) was up more than 2% in afternoon trading Friday, recovering from losses Thursday, though the fund was still down about 7% from the start of the month after a few difficult weeks for chip stocks.
TradingView
Semiconductor stocks took a hit this month amid concerns about tightening trade restrictions and as investors rotated into small-cap stocks, expecting they could benefit from Federal Reserve rate cuts.
However, analysts suggested the recent pressure on chip stocks could be short-lived as the broader rally in chip stocks this year makes a comeback on strong fundamentals and surging demand for AI.
3M Jumps 20% to a Two-Year High After Earnings
5 hr 41 min ago
Shares of 3M (MMM) soared as the conglomerate beat profit and sales estimates under new CEO William Brown. The company behind Post-it Notes and Scotch tape also raised its full-year earnings guidance.
The strong financial performance came as 3M refocused on growth following settlements of two big class-action lawsuits and the spinoff of its Solventum (SOLV) health care unit.
3M shares were up about 20% early Friday afternoon, trading at their highest level since August 2022. The stock’s surge was powering a 700-point gain for the Dow Jones Industrial Average.
TradingView
Deckers Stock Soars as Hoka and Ugg Sales Jump
6 hr 39 min ago
Deckers Brands (DECK) shares surged Friday, a day after the footwear company released earnings that showed sales for its popular Hoka and Uggs brands jumped 30% and 14%, respectively, compared to the same time last year.
G Fiume/Getty Images
Deckers reported $825.3 million in sales for the first quarter of fiscal 2025, up just over 22% from $675.8 million a year ago, and above analysts’ expectations, according to estimates compiled by Visible Alpha.
The company earned $115.63 million in net income, more than double the $55.25 million it reported in the first quarter last year and topping projections.
Charter Communications Jumps on Earnings Beat
7 hr 17 min ago
Charter Communications (CHTR) shares soared Friday after the cable, phone, and internet provider posted better-than-expected results on higher demand for its mobile service.
Charter reported second-quarter earnings per share (EPS) of $8.49, with revenue up less than 1% to $13.69 billion. Both beat consensus estimates of analysts polled by Visible Alpha.
Revenue from its mobile service jumped 36.9% to $737 million. Internet service, the company’s biggest segment, posted a 1.3% revenue gain to $5.81 billion.
Charter shares were up 16% in recent trading, leading Nasdaq advancers.
TradingView
Dexcom Plunges on Weak Earnings, Guidance
8 hr 33 min ago
Shares of Dexcom (DXCM) tumbled 40% in early trading Friday after the company reported second-quarter earnings that missed estimates and slashed its full-year revenue guidance.
The maker of glucose monitors said it now expects full-year organic revenue growth of 11% to 13%, down from its projection in April of 17% to 21%
Dexcom shares look set to break down from a symmetrical triangle, a chart pattern that often precedes a trending move in the direction of the breakout.
The Dexcom share price could attract buying interest at key chart levels including $70, $52, $37, and $24.
It’s also worth noting that, on the four occasions the relative strength index has fallen below the 30 threshold since 2016, the stock has gone on to gain at least 40% within the next six months.
Read our full technical analysis here.
Stock Index Futures Higher Ahead of Key Inflation Data
10 hours ago
Futures tied to the Dow Jones Industrial Average were up 0.7%.
TradingView
S&P 500 futures were up 0.9%.
TradingView
Nasdaq 100 futures were up 1.1%.
TradingView
