US stocks rebound on Friday after a week of steep losses
4:05 p.m .: Widespread rally puts a silver lining on a cloudy week
After a massive sell-off that dominated most of the week, US markets recovered some ground on Friday. The Dow Jones added 466 points, 1.5%, to close at 32,196. The Nasdaq jumped 434 points, 3.8%, to 11,805, and the S&P 500 added 94 points, 2.4%, to end the week at 4,024. Over 90% of the S&P 500 constituents were in the green.
Despite the positive trend, Twitter Inc (NYSE: TWTR) ended nearly 10% lower at $40.70 following reports that Elon Musk’s plan to buy the social media giant may be on hold.
Friday’s rally may not signal the end of the broader downtrend either, according to LPL Financial’s Ryan Detrick.
“There’s probably not too much downside risk in our view, but we could have one more whoosh,” he said, as reported by CNBC. The Nasdaq, down 27% from its all-time high, is considered to be in a bear market. The Dow and S&P narrowly avoided this distinction.
12:05 p.m .: Nasdaq leads rally in US stocks at noon
U.S. stocks remained in positive territory midday midday, recouping some of the losses incurred during the week.
At midday, the Nasdaq had gained 442 points or 3.9% to 11,813 points.
The Dow Jones and the S&P 500 also jumped 1.5% and 2.5% respectively.
Twitter Inc (NYSE: TWTR), however, remained deep in the red, down about 8% to $41.40 per share, following news that Elon Musk’s proposed $44 billion acquisition from the social media company was pending.
For a second day, meme stocks surged with Robinhood Markets Inc (NASDAQ:HOOD) up 25% at midday.
GameStop Corp (NYSE:GME) and AMC Entertainment Holdings (NYSE:AMC) Inc had also jumped 13.6% and 9% respectively by noon.
Meanwhile, the University of Michigan consumer sentiment index fell to 59.1 from 65.2, below the analyst consensus of 64.
Pantheon Macroeconomics chief economist Ian Shepherdson said the combination of falling stocks and rising gasoline meant people were unhappy.
“The Michigan index has weakened much more than the Conference Board survey in recent months, likely because the survey places more weight on personal finances, which have been hit hard by rising inflation and falling stock prices,” Shepherdson said.
“We expect people to reduce their savings in order to maintain spending.”
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9:40 a.m.: US stocks rebound at the open
U.S. stocks opened higher on Friday morning after a week of steep losses amid lingering inflation concerns and speculation of further Fed monetary policy tightening.
Shortly after opening, the Dow was up 245 points or 0.8% to 31,976 points.
The S&P 500 had gained 47 points or 1.2% to 3,977 points and the Nasdaq had jumped 214 points or 1.9% to 11,585 points.
Meanwhile, shares of Twitter Inc (NYSE: TWTR) plunged about 11% after news that Tesla Inc (NASDAQ: TSLA) CEO Elon Musk had put his $44 billion deal on hold. acquire the social media company.
Musk said he was waiting for confirmation that spam and fake accounts make up less than 5% of the platform’s users, tweeting that he was “still committed to acquisition”.
06:30: Modest rebound seen
U.S. stocks were expected to open higher on Friday in a modest rebound from heavy losses for most of the week as investors continue to grapple with the specter of high inflation and rising interest rates.
Key inflation indicators in the world’s largest economy showed this week that price pressures are not easing as the US Federal Reserve appears not to deviate from a path of aggressive rate hikes. of interest.
In Europe, Russia’s invasion of Ukraine continues and the resulting sanctions on Russian oil exports are keeping commodity prices high.
Futures on the Dow Jones Industrial Average added 0.6% in premarket trading, while those on the broader S&P 500 index gained 0.95% and contracts on the Nasdaq-100 rose by 1.5%.
“Nothing has materially changed in the world since yesterday, and on the contrary, Russia/Europe risks are increasing. Today’s rally looks more like a technical rebound from a torrid week than a structural reversal in sentiment. As such, it should be taken with a grain of salt,” cautioned Jeffrey Halley, Senior Market Analyst, Asia-Pacific, OANDA.
It’s been a choppy week for equity markets after U.S. consumer price data came in higher than expected on Wednesday. Headline CPI inflation was 8.3% in April, slower than the 8.5% seen in March, but above expectations of around 8.1%. There is no indication yet whether inflation has peaked. Ex-factory prices for April, released on Thursday, painted a similar picture. The producer price index was lower in April compared to March, but still exceeded expectations.
Meanwhile, US Fed Chairman Jerome Powell said yesterday that achieving a hoped-for soft landing for the US could be a big ask.
“So a soft landing is…really getting back to 2% inflation while maintaining a strong labor market. And it’s quite difficult to accomplish that right now, for a number of reasons,” Powell said in an interview with Marketplace.
Elsewhere, oil prices rose amid rising tensions between Russia and the European Union. WTI crude futures rose 1.6% to $107.81 a barrel, while Brent crude futures also rose 1.6% to $109.15 a barrel.
“As Europeans circumvent their own sanctions against Russia by opening accounts with Gazprom bank to pay for Russian gas in exchange for rubles, the latest news suggests that Russia is now cutting off German gas in retaliation for its sanctions,” Ipek said. Ozkardeskaya, senior analyst at Swissquote Bank.
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