In a remarkable display of resilience, the Dow Jones Industrial Average extended its record closing streak last Friday, as markets assessed the Federal Reserve's preferred inflation gauge. The Dow surged 0.6% to close at 41,563.1, marking yet another milestone in its impressive performance. The tech-heavy Nasdaq Composite also enjoyed a notable rise, jumping 1.1% to reach 17,713.6, while the S&P 500 witnessed a 1% increase, closing at 5,648.4.
Consumer discretionary stocks led the way, showcasing a robust 1.9% gain across the sector. For the month of August, the S&P 500 notched an advancement of 2.3%, with the Dow following closely behind with a 1.8% increase. The Nasdaq, while still positive, managed a more modest gain of 0.7% during the same period.
Investors will observe a pause in market activities on Monday due to the Labor Day holiday in the United States. In terms of economic indicators, recent government data revealed that consumer spending in the U.S. rose in alignment with market expectations during July. Additionally, the Federal Reserve's preferred inflation metric remained unexpectedly steady at the annual level.
Analysts at BMO commented, "This personal income and spending report was precisely what the Fed needed to bolster its confidence to commence reductions in interest rates. Moderated headline and core price readings, coupled with a slowdown in real disposable income growth, should aid in keeping inflation and consumer spending in check, even as the Fed embarks on its journey to mitigate monetary restrictions." Consumer sentiment in August saw its first improvement in five months, reflecting a shift in confidence among households, while inflation expectations for the upcoming year continued to decline, as highlighted by the final results from the University of Michigan's Surveys of Consumers. On the bond market front, the yield on U.S.
10-year Treasuries increased by 4.2 basis points, reaching 3.91%, whereas the two-year rate rose by 2.6 basis points to settle at 3.92%. In company-specific news, shares of Intel Corporation ($INTC) soared by 9.5%, marking it as the top gainer on both the S&P 500 and the Dow, and securing the second-best performance on the Nasdaq.
Reports from Bloomberg indicated that the chipmaker is collaborating with investment banking giants Morgan Stanley and Goldman Sachs to navigate through various challenges it faces. Additionally, Intel and International Business Machines Corporation ($IBM) announced on Thursday that they have entered into a partnership, allowing the installation of Intel's Gaudi 3 artificial intelligence accelerators on IBM Cloud.
Following this news, IBM's shares climbed 1.6% on Friday. MongoDB Inc. ($MDB) showcased an impressive rally, emerging as the best performer on the Nasdaq with an 18% increase. The database software firm raised its full-year outlook following unexpectedly strong results for the fiscal second quarter, as noted by RBC Capital Markets in a recent report. Conversely, Ulta Beauty Inc.
($ULTA) experienced a decline in its shares, falling by 4%, the steepest drop on the S&P 500. The beauty retailer reported earnings and comparable sales that fell short of expectations for its fiscal second quarter and downgraded its guidance outlook, which analysts at Evercore ISI expect will weigh on the company’s share price in the near future. Overall, companies within the S&P 500 have reported impressive quarterly per-share earnings growth of nearly 12% year over year on average, with 74% exceeding Wall Street expectations as the current reporting season nears its conclusion, according to insights from UBS Securities. In commodities, West Texas Intermediate crude oil saw a decline of 3.1%, settling at $73.57 a barrel.
Precious metals also witnessed downturns, with gold falling 1% to $2,535.40 per troy ounce, and silver decreasing by 2.5%, priced at $29.25 per ounce. Investors keenly track key market indices: $US30, $US500, $INTC, $IBM, $MDB, and $ULTA as they navigate the current market landscape and prepare for potential shifts in the economic horizon..