After showing a lack of direction early in the session, stocks moved sharply higher over the course of the trading day on Friday. The major averages all showed strong moves to the upside, partly offsetting the substantial pullback seen during Thursday’s session.
The major averages moved roughly sideways going into the close, hovering firmly in positive territory. The Nasdaq shot up 337.14 points or 2.1 percent to 16,724.46, the S&P 500 (SPI:SP500) surged 95.31 points or 1.8 percent to 5.363.36 and the Dow jumped 619.05 points or 1.6 percent to 40,212.71.
Largely reflecting the historic rally on Wednesday, the major averages also posted strong gains for the week. The Nasdaq skyrocketed by 7.3 percent, while the S&P and the Dow spiked by 5.7 percent and 5.0 percent, respectively.
The significant strength that emerged on Wall Street came as concerns about rising trade tensions between the U.S. and China were partly offset by comments from White House press secretary Karoline Leavitt saying President Donald Trump is “optimistic” about reaching a trade deal with China.
“The president has made it very clear he’s open to a deal with China,” Leavitt told reporters. “If China continues to retaliate, it’s not good for China.”
However, two senior White House officials told CNN that the U.S. will not reach out to China first and that Chinese President Xi Jinping must request a call with Trump.
China has also announced plans to increase tariffs on U.S. imports to 125 percent beginning Saturday, continuing the tit-for-tat exchange on trade seen in recent days.
The 125 percent would match the tariff on China goods announced by President Donald Trump earlier this week, although a White House official told CNBC the effective rate is 145 percent when combined with a 20 percent fentanyl-related tariff.
Meanwhile, the European Union has announced that it is suspending its planned countermeasures to Trump’s tariffs for 90 days.
European Commission trade spokesperson Olof Gill also told Ireland’s RTE radio European Trade Commissioner Maros Sefcovic will travel to Washington on Sunday to “try and sign deals.”
On the U.S. economic front, preliminary data released by the University of Michigan showed a continued slump by U.S. consumer sentiment in the month of April.
The University of Michigan said its consumer sentiment index tumbled to 50.8 in April after plunging to 57.0 in March. Economists had expected the consumer sentiment index to fall to 54.5.
With the much bigger than expected decrease, the consumer sentiment index dropped to its lowest level since hitting 50.0 in June 2022.
The report also said year-ahead inflation expectations surged to 6.7 percent in April from 5.0 percent in March, reaching the highest reading since 1981.
A separate report released by the Labor Department showed an unexpected decrease by producer prices in the month of March, although the data has largely been shrugged off as “old news.”
Sector News
Gold stocks moved sharply higher along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 6.1 percent to its highest closing level in over twelve years.
A surge by the price of crude oil also contributed to substantial strength among oil service stocks, as reflected by the 4.7 percent spike by the Philadelphia Oil Service Index.
Biotechnology stocks also turned in a particularly strong performance on the day, with the NYSE Arca Biotechnology Index jumping by 3.3 percent.
Brokerage, steel and semiconductor stocks also saw significant strength, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index plunged by 3.0 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent.
The major European markets also ended the day mixed. While the U.K.’s FTSE 100 Index climbed by 0.6 percent, the French CAC 40 Index fell by 0.3 percent and the German DAX Index slid by 0.9 percent.
In the bond market, treasuries moved sharply lower after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.9 basis points to a two-month closing high of 4.493 percent.
Looking Ahead
News on the trade front is likely to remain in the spotlight next week, while reports on retail sales, industrial production, import and export prices and housing starts may also attract attention.
Traders are also likely to keep an eye on earnings news from companies like Goldman Sachs (NYSE:GS), Bank of America (NYSE:BAC), Citigroup (NYSE:C), Johnson & Johnson (JNJ). Travelers (TRV), American Express (NYSE:AXP), UnitedHealth (UNH), and Netflix (NFLX).
SOURCE: RTTNEWS