US benchmark equity indexes experienced a notable increase on Friday as traders analyzed the latest manufacturing sector data along with comments from a Federal Reserve official. The Nasdaq Composite surged by 1.8%, reaching a value of 19,621.7, while the S&P 500 saw a 1.3% rise to 5,942.5. The Dow Jones Industrial Average also climbed, advancing by 0.8% to 42,732.1.
Among the sectors, consumer discretionary led the gains, although materials ended the day with little change, marking a generally positive trading environment where no sector recorded a loss. For the week, the Dow displayed a modest decline of 0.6%, accompanied by decreases of 0.5% each for the S&P 500 and the Nasdaq.
This indicates a slight pullback amid increased investor caution. In terms of economic indicators, the US manufacturing sector's contraction showed signs of improvement in December, driven by a rise in demand as indicated by the Institute for Supply Management's survey. BMO Capital Markets noted, "On balance, the report suggests manufacturers ended the year with a hint of optimism, but they could face some pretty stiff challenges in the new year." Additionally, a recent survey conducted by S&P Global revealed that the US manufacturing sector remained in contraction territory last month, impacted by reduced output and new orders, with sentiment hitting the lowest level since August. On the bond market front, the US two-year yield rose by 3.7 basis points, settling at 4.29%, while the 10-year rate saw an increase of 2.7 basis points to 4.60%.
These movements suggest some volatility within the market. Richmond Fed President Tom Barkin expressed optimism regarding the US economy, projecting a positive baseline expectation for 2025, owing to robust consumer spending, although he acknowledged the risks posed by inflation. Barkin commented, "I expect the story for the coming year to be more about supply and demand -- and perhaps geopolitics -- than monetary policy.
Were employment to falter or inflation to reemerge, we have the tools to respond." In commodities, West Texas Intermediate crude oil experienced a rise of 1.2%, trading at $74.03 a barrel on Friday. Turning to company-specific news, Nvidia is anticipated to unveil new gaming products at the forthcoming CES tech show, which has investors eager for updates regarding the company’s generative artificial intelligence sales, according to a note from Wedbush Securities.
The shares of the chip-making giant jumped by 4.5%, making it the top gainer on the Dow. Tesla emerged as one of the best performers on the S&P 500 and Nasdaq, surging by 8.2%. Reports indicate that the electric vehicle manufacturer's sales in China reached a record high in 2024. Furthermore, Evercore ISI adjusted its price target on Tesla’s stock upward from $195 to $275. In contrast, Adobe shares plummeted by 2.4%, marking the largest decline on the Nasdaq, as UBS recalibrated its price target for the software maker’s stock from $525 to $475. Lastly, President Joe Biden took action to block United States Steel's proposed acquisition by Japan's Nippon Steel, citing national security concerns and supply chain risks, resulting in a 6.5% slump in United States Steel's shares. In the precious metals market, gold dipped by 0.7% to $2,650.70 per troy ounce, whereas silver recorded a slight increase of 0.7%, trading at $30.1 per ounce..