Stocks rallied on Friday in response to a new round of bank earnings and promising economic data as fears of a 100-basis-point rate hike from the Federal Reserve to subdue rising inflation subsided.
The Dow Jones Industrials leaped 658.09 points, or 2.2%, to 31,288.26.
The S&P 500 regained 72.78 points, or 1.9%, to 3,863.16.
The NASDAQ Composite climbed 201.24 points, or 1.8%, to 11,452.42.
Despite Friday’s rally, all the major averages closed out the week with losses. The Dow slipped close to 0.2% while the S&P dished off 0.9% while the NASDAQ fell nearly 1.6%. The session’s moves left the S&P 500 roughly 19% off its highs.
A new round of bank results from Wells Fargo and Citigroup offered further insight into the state of the economy. Wells Fargo popped 6.2% even as quarterly profits declined 48% and the bank set aside funds for bad loans. Citigroup soared 13.3% as it beat estimates and benefited from a rising rate environment.
A day earlier, investors combed through troubling reports from JPMorgan Chase and Morgan Stanley, which kicked off major bank earnings, and also weighed the likelihood of larger interest rate hikes from the Federal Reserve and looming recession concerns.
Along with fresh bank earnings, traders digested strong preliminary consumer sentiment data and retail sales that beat expectations. Those numbers appeared to soothe concerns that the Fed will hike by 100 basis points at upcoming policy meetings and indicated that consumers are bolstering retail spending even as inflation hits record highs.
Battered tech stocks also jumped on Friday. Meta Platforms gained 4.2%,, Salesforce was up 3.9% and Amazon picked up 2.6%,, while Netflix soared 8.2%. UnitedHealth increased 5.4%,,JPMorgan Chase was better 4.4%,and American Express took on 4.4% to lead the Dow’s
In other news, Pinterest shares surged 16.2% following a Wall Street Journal report that said activist investor Elliott Management took a stake of more than 9% in the social media company.
Economically, June retail sales came in ahead of expectations on Friday, rising 1% on a monthly basis and ahead of Dow Jones’ estimate of 0.9% and indicating that consumers are bolstering retail spending even as inflation hits record highs. Preliminary consumer sentiment data also came in ahead of expectations.
Treasury prices gained, lowering yields to 2.93% from Thursday’s 2.96%. Treasury prices and yields move in opposite directions.
Oil prices picked up $1.66 to $97.44 U.S. a barrel.
Gold prices fell $1.70 to $1,704.10 U.S. an ounce.