The Dow rallied on Friday, marking its fourth consecutive weekly win, driven by positive corporate earnings and cooling inflation data. The Dow Jones Industrial Average rose 654 points (1.6%), the S&P 500 increased by 1.1%, and the NASDAQ Composite also gained 1.1%, despite the latter two posting two straight weeks of losses.
Cooling Inflation Data Puts September Rate Cut in Play
The PCE price index, the Federal Reserve’s preferred inflation measure, rose 0.1% monthly and 2.5% annually in June. While a rate cut is not expected in next week’s Fed meeting, Macquarie anticipates the Fed will signal potential reductions in September.
Treasury Yields Fall, Boosting Tech Stocks
Optimism for a rate cut pushed Treasury yields lower, sparking a resurgence in tech stocks. Major tech earnings are expected next week, with Microsoft and Apple leading the spotlight. Microsoft’s cloud business Azure and AI investments are particularly anticipated by investors.
Impressive Earnings Boost Key Stocks
3M surged nearly 23% after raising its profit forecast, while Bristol-Myers Squibb and Deckers Outdoor also posted strong earnings, rising 11% and 6%, respectively. Conversely, DexCom slumped 41% after cutting its revenue forecast due to lower-than-expected new customers.
