June 24 (Reuters) – Wall Street’s major indexes soared in a broad rally on Friday as signs of slowing economic growth and a recent pullback in commodity prices dampened expectations for plans to raise stocks. Federal Reserve rate.
The S&P 500 rose more than 3% for its largest one-day percentage gain since May 2020. All 11 sectors in the benchmark index finished at least 1.5% higher.
Stocks rebounded this week as financial markets were rocked by fears that swift rate hikes by the Fed to tame inflation to a 40-year high could trigger a recession.
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Still, investors have been weighing when the market might bottom after the benchmark S&P 500 (.SPX) index fell 20% from its January closing high earlier this month, confirming common definition of a bear market.
“Some of the moves, the sellers are running out, so you don’t have as much capital coming out,” said Shawn Cruz, chief strategist at TD Ameritrade.
“It could be a bit of a relief rally,” Cruz said. “But I don’t think I would encourage anyone to start playing two-handed just yet, because we’ve seen that a couple of times where those things can reverse quite quickly.”
The Dow Jones Industrial Average (.DJI) rose 823.32 points, or 2.68%, to 31,500.68, the S&P 500 (.SPX) gained 116.01 points, or 3.06%, to 3,911.74 and the Nasdaq Composite (.IXIC) added 375.43 points, or 3.34%, to 11,607.62.
For the week, the S&P 500 rose 6.4%, the Dow added 5.4%, the Nasdaq gained 7.5%.
Volume surged towards the end of the session as the close of trading marked the completion of FTSE Russell’s replenishment of its indexes which are tracked by billions of dollars in investor funds. Read more
US consumer confidence fell to a record low in June, but Americans saw a marginal improvement in the outlook for inflation, according to a survey released Friday. Thursday’s data indicated a slowdown in business activity in the United States in June. Read more
The sharp decline in commodity prices this week helped ease inflation fears. The Refinitiv/CoreCommodity index (.TRCCRB), which measures the prices of energy, agriculture, metals and other commodities, fell to a roughly two-month low on Thursday after hitting a peak multi-year earlier in June.
Fed funds futures traders now expect the benchmark rate to rise to around 3.5% by March, down from expectations last week that it would rise to around 4%.
“The expectation of future rate hikes is part of the equation that makes the stock market so strong today,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Va.
Banking stocks rallied, with the S&P 500 Banks Index (.SPXBK) rising 3.7%, after the Fed’s annual ‘stress test’ exercise showed lenders had enough capital to weather a severe economic downturn. Read more
In company news, shares of FedEx Corp (FDX.N) jumped 7.2% after the parcel delivery company released stronger-than-expected full-year earnings guidance. Read more
Advancing issues outnumbered declining ones on the NYSE by a ratio of 4.66 to 1; on the Nasdaq, a ratio of 2.15 to 1 favored advancers.
The S&P 500 posted 1 new 52-week high and 29 new lows; the Nasdaq Composite recorded 34 new highs and 86 new lows.
More than 19 billion shares changed hands on US exchanges, compared to the daily average of 12.9 billion over the past 20 sessions.
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Reporting by Lewis Krauskopf and Chuck Mikolajczak in New York, Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila and Grant McCool
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