S&P 500 ends up 3.1% in strong finale to positive week

NEW YORK (AFP) – Wall Street stocks finished a strong week on a solid note on Friday (June 24), advancing as the weakening economic outlook moderates expectations about central bank monetary tightening.

The broad-based S&P 500 added 3.1 per cent to stand at 3,911.74 at the end of Friday’s session, up almost 6.5 per cent for the week in one of the best seven-day stretches in an otherwise downcast 2022.

The Dow Jones Industrial Average gained 2.7 per cent to 31,500.68, while the tech-rich Nasdaq Composite Index jumped 3.3 per cent to 11,607.62.

Stocks rose three of four sessions in a holiday-shortened week, with investors pointing to the silver lining of increased recession risk: moderating expectations on Federal Reserve interest rate hikes.

The yield on the 10-year US Treasury note edged higher on Friday to 3.125, but has retreated from around 3.5 per cent earlier in the month.

Tom Cahill of Ventura Wealth Management noted that the price of oil and other commodities has also declined, lessening inflationary pressures.

“All of these things are coming together to put downward pressure on bond yields,” Cahill said. “And obviously, that’s good for the stock market.”

Friday’s economic data was mixed.

New home sales rebounded in May after a decline in the prior month, while the University of Michigan’s consumer sentiment index fell to the lowest level in its 45-year history, reflecting the drag from inflation.

Among individual companies, FedEx surged 7.2 per cent following an upbeat forecast as quarterly revenues jumped eight percent to US$24.5 billion (S$34 billion).

Large banks pushed higher after the Federal Reserve said 33 big banks had passed a stress test that assessed their ability to survive a financial crisis. Big gainers included Wells Fargo, which jumped 7.6 per cent, and Goldman Sachs, which added 5.8 per cent.