NEW YORK (AP) — Wall Street regained momentum on Friday, as the S&P 500 surged by 1.3%, marking its first increase since Christmas and its best performance over nearly two months. The rebound for major tech stocks helped end a five-day losing streak, the longest since April, and reduced its weekly loss to just 0.5%. The Dow Jones Industrial Average rose by 339 points, or 0.8%, and the Nasdaq composite spiked 1.8%.
Nvidia played a pivotal role in propelling the market upward, climbing 4.5%. Other technology companies involved with artificial intelligence also saw significant gains. Super Micro Computer, which supplies servers for AI applications, surged 10.9%, and Palantir Technologies increased by 6.3%. Solita Marcelli, chief investment officer, Americas, at UBS Global Wealth Management, remarked, “While the easy gains in AI may be behind us, we think this rally looks far from over.”
Tesla, another key player within the tech sector, bounced back with an 8.2% gain after reporting lower-than-expected electric vehicle deliveries during the last quarter of 2024. Conversely, Rivian saw impressive performance, soaring by 24.5% as it reported more than 14,000 vehicle deliveries, exceeding forecasts.
On the downside, U.S. Steel's shares plummeted by 6.5% following President Joe Biden’s intervention to block Nippon Steel's nearly $15 billion acquisition proposal for the Pittsburgh-based rival. Companies within the beverage sector faced declines as well, particularly after U.S. Surgeon General Vivek Murthy highlighted the correlation between alcohol consumption and cancer risk, advocating for revised health warning labels and updated consumption guidelines. Molson Coors Beverage fell 3.4%, and Brown-Forman, known for its Jack Daniel’s whiskey, dropped 2.5%.
Overall, the S&P 500 increased by 73.92 points to close at 5,942.47, the Dow ended at 42,732.13 with gains of 339.86 points, and the Nasdaq closed at 19,621.68, up by 340.88 points.
Despite recovering from its post-Christmas slump, Wall Street has felt the effects of recent fluctuations, particularly amid the backdrop of two solid years for U.S. stock indexes. Investors had previously benefited from consistent growth even as high interest rates contributed to lower inflation, nearly reaching the Federal Reserve’s target of 2%.
Looking forward, uncertainty looms as traders retract expectations for future interest rate cuts. Although the job market and economic indicators seem solid currently, inflation has proven stubborn, prompting the Fed to tighten its policies. This has raised concerns over potential tariffs and regulations from President-elect Donald Trump, which could contribute to inflationary pressures.
Internationally, stock markets have also been affected, particularly as fears surrounding the impact of U.S. tariffs weigh on foreign economies. The Chinese market, facing challenges with its property sector, saw stock values decline by 1.6% this week, even as Hong Kong stocks climbed by 0.7% to mitigate their weekly losses.
European indexes mirrored this downward trend, reacting to the global market’s instability. South Korea’s Kospi index, conversely, rallied by 1.8% following reassurance from finance minister Choi Sang-mok, who vowed more action to stabilize the national economy amid political upheaval.
Changes were also noted within the bond market, where Treasury yields increased after positive manufacturing data offered slight optimism. The Institute for Supply Management reported another month of contraction for manufacturers, though the results were not as dire as analysts had anticipated. The yield on the 10-year Treasury rose to 4.59% from 4.56%, and the two-year yield, more sensitive to Fed policy predictions, increased to 4.28% from 4.25%.
Overall, as Wall Street continues to grapple with recent fluctuations and forecast uncertainty, market participants remain vigilant, weighing the potential impacts of geopolitical events and domestic economic policies on both performance and growth prospects.