U.S stocks end last trading session green

Wall Street concluded a volatile week on a good note with a rally in U.S. stock markets on Friday as investors considered recent U.S. inflation figures.

The Dow Jones Industrial Average closed at 40,589.34 index points, up 1.64%. The Nasdaq Composite closed at 17,357.88 index points, up 1.03%, while the S&P 500 increased 1.11% to conclude at 5,459.10 index points.

However, the Nasdaq saw a 2.1% loss, and the S&P 500 fell by 0.8% for the week. For the first time since April, both indices had consecutive weekly declines. For the first time since May, the Dow outperformed, rising 0.8% and recording its fourth straight positive week. Investors appeared to be rotating into small caps and cyclicals at the time of the move.

The combined factors that led to Friday’s trading activity are the oversold feeling, the stronger-than-expected GDP figure on Thursday, and the belief that the Federal Reserve will start reducing rates because of the economy’s resiliency.

The Russell 2000 witnessed a rise of 1.67% as investors persisted in shifting towards small caps and cyclical market sectors. The S&P materials and industrials sector saw a 1.7% increase in value due to rising stock prices. 3M surged 23% higher, driving the industrials sector higher. It was the best day for the stock since at least 1972.

Some big giants saw gains; Microsoft and Amazon added more than 1% each amid this week’s sell-off. Meta Platforms saw an almost 3% increase. The S&P’s information technology index saw a 1% increase.

Participants in the market also evaluated the PCE price index for June, a favorite inflation figure for central bank policymakers. The headline PCE increased by 2.5% from a year ago and by 0.1% in a month. That matched the projections of the economists Dow Jones surveyed.

The positive inflation report has raised investor expectations for more rate cuts this year; the fed funds futures market has already factored in decreases in September, November, and December.