Stocks rallied on Friday as rising expectations for additional stimulus in Europe helped subdue fears of a slowdown in global growth. The Dow added 306 points, while the S&P 500 gained 1.4%. The Nasdaq Composite jumped 1.7%.
Optimistic comments on the trade front from President Trump and yesterday’s positive retail sales figures also helped to buoy investor sentiment. In a press conference on Thursday, President Trump revealed he still anticipates face-to-face negotiations to take place next month and does not foresee a prolonged trade war with China. Meanwhile, Treasuries were mixed with the longer-dated yields rebounding from record lows. The benchmark 10-year note yield climbed six basis points to 1.56%, while the yield on the 30-year bond rose to 2.03%. On the data front, housing starts declined more than anticipated in July, while building permits jumped the most since June 2017. Another release showed a preliminary reading on consumer sentiment fell to a seven-month low in August.
All 11 S&P 500 sectors finished higher, with nine groups adding more than 1%. Industrial stocks paced the gains with Deere & Co adding 3.8%, despite falling short of consensus profit estimates and lowering its forward guidance. The Technology sector also outperformed with NVDIA rallying 7.3% after the chipmaker topped analyst expectations on both the top and bottom line. In commodities, WTI crude rose 0.8% to $54.92/barrel while COMEX gold fell 0.5% to $1,512.50/ounce.
Despite today’s gains, the major averages capped their third consecutive weekly decline. The Dow retreated 1.5%, the S&P 500 slid 1.0%, and the Nasdaq lost 0.8%.