U.S. stocks rebounded on Friday, recovering from sharp losses the previous day, thanks to positive consumer inflation outlook news. This rally propelled the Nasdaq to its fifth consecutive week of gains and a record closing high.
Key Economic Indicators
The Commerce Department reported that new orders for key U.S.-manufactured capital goods rebounded more than expected in April. Additionally, the University of Michigan noted an improvement in consumers’ inflation expectations for late May after earlier declines in the month.
Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, commented, “Today’s data came in better than expected. Durable goods orders were solid, and consumer sentiment, though not excellent, was better than anticipated. This has prompted a bounce-back as investors reassess the economic outlook.”
Market Performance
The S&P 500 gained 36.86 points, or 0.70%, closing at 5,304.70 points. The Nasdaq Composite rose 184.98 points, or 1.11%, finishing at 16,921.02. Meanwhile, the Dow Jones Industrial Average edged up by 6.19 points, or 0.02%, to close at 39,071.45.
Despite Friday’s gains, the Dow broke its five-week winning streak, having registered its largest daily percentage decline in over a year on Thursday. Trading volumes were subdued ahead of the Memorial Day market holiday on Monday.
Investor Sentiment and Future Outlook
Thursday’s decline in U.S. stocks was driven by economic data indicating rising price pressures, which tempered expectations for Federal Reserve rate cuts this year. This negative sentiment overshadowed Nvidia’s strong quarterly results, which had bolstered investor confidence in growth prospects for artificial intelligence-related stocks.
Communication services were the top-performing sector on Friday, gaining over 1%, while technology and utilities sectors each rose around 1%.
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