Major U.S. indexes surged Friday as several large-cap technology stocks recovered from steep losses the previous session, while small caps continued rising amid optimism the Federal Reserve will cut interest rates soon.
The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all gained ground, with the Nasdaq up nearly 1% around midday. The S&P 500 and Nasdaq Composite snapped seven-session winning streaks on Thursday as investors rotated out of large-cap tech stocks into shares of small-cap companies that stand to benefit from a Fed rate cut.
The Dow was back above 40,000 for the first time in nearly two months after briefly hitting an all-time intraday high. The Russell 2000 small-cap index was up more than 1%, after surging 3.6% yesterday.
The recent rally for major indexes had been fueled by the strong performance of tech stocks and hopes the Fed will cut its influential fed funds rate soon.
After dropping sharply Thursday, shares of AI investor favorite Nvidia (NVDA) were up more than 2% on Friday, while Apple (AAPL), Tesla (TSLA) Intel (INTC), and Arm Holdings (ARM) were also on the rise. Meta Platforms (META), however, was down once again Friday.
Shares of Wells Fargo (WFC) were the biggest S&P 500 decliner, down more than 7%, after the bank released its second quarter results. JPMorgan Chase (JPM) and Citigroup (C) also lost ground after their earnings releases.
The yield on 10-year Treasurys was at 4.19%, after rising to around 4.23% in early trading after a hotter-than-expected government report on wholesale inflation in June. The yield slipped below 4.2% on Thursday for the first time since March after the consumer price report for showed inflation easing, which solidified expectations that the Fed will be cutting interest rates in September.
Wells Fargo Leads S&P 500 Decliners
1 hr 9 min ago
Wells Fargo (WFC) shares sank Friday after the lender reported a slump in second-quarter net interest income that offset higher-than-forecast results.
Net interest income (NII), a key measure of lending profitability, fell 9% year-over-year to $11.9 billion for the three months ended June 30.
Competition for borrowers as depositors seek higher interest rates has taken a toll on the banking sector’s NII, which measures loans revenue minus what banks pay for deposits and funds. Banks like Wells Fargo, which are more focused on consumer banking, have been especially hurt by declines in NII.
The slump in net interest income overshadowed results that beat Wall Street analysts’ estimates. Well Fargo reported earnings per share (EPS) of $1.33 on revenue of $20.7 billion, beating analysts’ estimates compiled by Visible Alpha of $1.28 and $20.3 billion, respectively.
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Walls Fargo shares were down nearly 7% around midday.
Shares of JPMorgan Chase (JPM) and Citigroup (C) also lost ground Friday, despite earnings reports that came in better than analysts expected.
Watch These Russell 2000 Levels as Small Caps Rise
2 hr 16 min ago
The Russell 2000 was up 1.7% in mid-morning trading after jumping 3.6% on Thursday as investors rotated from mega-cap tech stocks into smaller companies perceived to get a bigger boost from potential Federal Reserve rate cuts.
The index broke out from a symmetrical triangle on Thursday, paving the way for the start of a new trend higher.
The measuring principle projects a shorter-term target of 2,295. A bars pattern predicts a longer-term target around 2,500.
During retracements, the index could retest the symmetrical triangle’s top trendline near 2,080.
Read our technical analysis for a detailed review of the mportant levels to watch out for.
Apple Remains in Uptrend Despite Thursday Pullback
3 hr 13 min ago
Apple (AAPL) shares were on the rise this morning after shedding 2.3% on Thursday as investors pivoted out of top-performing large-cap tech stocks into small caps that may benefit more from expected rate cuts by the Federal Reserve this year.
Despite Thursday’s drop, Apple shares remain in an uptrend, with the price continuing to gain momentum this month after breaking out from a pennant pattern.
The measuring principle, which calculates the distance of the trend in points that proceeded the pennant and adds that amount to the pattern’s top trendline, forecasts a price target of $271.
During pullbacks, Apple shares may encounter support on the chart at levels including $220, $197, and $190.
Read our technical analysis here.
Futures Tied to Major Indexes Near Unchanged
4 hr 21 min ago
Dow Jones Industrial Average
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