Wall Street Takes a Breather After Thursday’s Surge
After a remarkable Thursday that saw the S&P 500 close with its best performance in nearly two years, soaring 2.3%, Wall Street’s momentum slowed on Friday, with the market lacking any significant economic events to fuel further gains.
Key Takeaways:
- Trading Slowdown: Major indices were either slightly positive or hovering near the flat line, indicating a pause in the strong bullish sentiment observed the previous day.
- Slight Dip for the Week: The S&P 500 is currently down 0.5% for the week, and its fate for the fourth consecutive weekly decline will be determined in the remaining hours of trading.
- Bond Yields Decline: There was a renewed demand for long-dated U.S. Treasury bonds, leading to a decline in yields by around 6 basis points for both the 10-year and 30-year notes. This resulted in a 1% rally for the iShares 20+ Year Treasury Bond ETF (TLT), breaking a three-session losing streak.
- Bitcoin Dips: Despite its best-performing day since February 2022 with a nearly 12% surge, Bitcoin (BTC/USD) tumbled 2% on Friday.
A Look at the Market: Indices, ETFs, and Key Movers
Major Indices and ETFs
The S&P 500 rose 0.2% to 5,329.24, while the Nasdaq 100 gained 0.1% to 18,426.22. The Dow Jones Industrial Average remained virtually flat, closing at 39,435.12. The Russell 2000 fell 0.5% to 2,075.91.
Key ETFs mirrored the overall market trends:
- The SPDR S&P 500 ETF Trust (SPY) was up 0.2% at $531.66.
- The SPDR Dow Jones Industrial Average (DIA) traded flat at $394.74.
- The tech-heavy Invesco QQQ Trust Series (QQQ) edged 0.2% higher to $448.94.
- The iShares Russell 2000 ETF (IWM) dropped 0.5% to $205.88.
- The Health Care Select Sector SPDR Fund (XLV) outperformed, rising 0.4%, while the Industrial Select Sector SPDR Fund (XLI) lagged behind, down 0.2%.
Notable Stock Movers
- Palantir Technologies Inc. (PLTR) climbed 1.5%, building upon the previous day’s 11% surge resulting from its partnership with Microsoft Corp. (MSFT) to deliver advanced cloud, artificial intelligence, and analytics capabilities to U.S. defense and intelligence agencies. Palantir’s shares are on track to close at their highest level since February 2021.
- Eli Lilly & Co. (LLY) soared over 6% following multiple investment banks raising their price targets after the company reported strong earnings in the previous quarter.
- Cisco Systems Inc. (CSCO) declined over 1% after announcing plans for significant job cuts, marking its second round of layoffs this year. The company is shifting its focus towards fast-growing sectors such as cybersecurity and artificial intelligence.
- Akamai Technologies, Inc. (AKAM) climbed 10%, while CarGurus, Inc. (CARG) surged 18%, both reacting to their respective earnings reports. Conversely, elf Beauty, Inc. (ELF) dropped 15%, and Five9, Inc. (FIVN) plummeted 26%, also in response to their earnings announcements.
September Fed Meeting: Rate Cut Odds Now Nearly Even
The CME Group’s FedWatch tool indicates a near-even split among traders regarding the Federal Reserve’s September interest rate decision. Traders are now placing nearly equal odds on a 50-basis-point cut or a 25-basis-point cut.
Insights from Benzinga Pro
According to Benzinga Pro data:
- The market showed a mixed reaction to earnings reports from various companies, reflecting the continued volatility and uncertainty surrounding economic conditions.
- Notable earnings reactions included:
- Dropbox, Inc. (DBX): Up 2.3%
- Expedia Group, Inc. (EXPE): Up 9%
- Gilead Sciences, Inc. (GILD): Down 3%
- Insulet Corporation (PODD): Down over 7%
- New Fortress Energy Inc. (NFE): Down 26%
- Take-Two Interactive Software, Inc. (TTWO): Up 2.5%
- Trade Desk, Inc. (TTD): Up 9.7%
- Unity Software Inc. (U): Up 11%
- Yelp Inc. (YELP): Up 2.6%
In conclusion, Friday’s market action presented a contrast to the prior day’s enthusiasm, with traders taking a more cautious approach in the absence of major economic news. The increasing odds of a September rate cut by the Federal Reserve continue to generate market uncertainty, making the next few weeks crucial for investors to monitor.
