US benchmark equity indexes experienced a significant recovery on Friday, fueled by growing optimism that a potential government shutdown will be averted. Despite recent setbacks during the week, the stock markets closed positively, indicating a resilient investor sentiment. The Nasdaq Composite surged by 2.6%, closing at 17,754.1, while the S&P 500 saw a gain of 2.1%, ending the day at 5,638.9.
The Dow Jones Industrial Average registered an increase of 1.7%, reaching 41,488.2. This upward momentum was widespread across all sectors, with technology and energy leading the charge. Stifel provided insights, noting, "The market appears optimistic the US government can avoid a shutdown after Senate Democratic Leader Chuck Schumer reportedly dropped his objection to the latest spending bill proposal." This news brought a sense of relief to investors who were anxiously monitoring the developments surrounding budget negotiations. On the previous Thursday, the S&P 500 had experienced a sharp decline of 1.4%, pushing the index down by approximately 10.1% from its latest record close.
This dip indicated a correction phase for the index, reflecting broader concerns among investors. The Dow, over the course of the week, slid by 3.1%, while both the S&P 500 and Nasdaq fell by over 2% each. In additional economic updates, consumer sentiment in the US took a hit in March, with year-ahead inflation expectations hitting their highest levels since November 2022.
The preliminary results from a University of Michigan survey unveiled significant concerns about policy uncertainty. Joanne Hsu, the Director of Surveys of Consumers, remarked, "Expectations for the future deteriorated across multiple facets of the economy. Many consumers cited the high level of uncertainty around policy and other economic factors." In geopolitical news, US President Donald Trump made headlines with his announcement regarding trade tariffs.
He stated that the White House plans to impose a staggering 200% tariff on all alcohol products imported from the European Union unless a retaliatory tariff on US whiskey is rescinded. This move has heightened tensions, given that both Canada and the EU recently unveiled their own retaliatory tariffs against American products. In the commodities market, gold prices dropped by 0.2%, bringing the price to $2,982.92 per troy ounce.
Earlier in the day, spot gold managed to surpass the $3,000 mark for the first time, a reflection of the rising demand for safe-haven assets amidst tariff concerns and inflation risks. ING commented, "Tariff concerns that risk higher inflation and slower economic growth are spurring demand for safe-haven assets like gold." Silver prices fell by 0.2%, settling at $34.23 per ounce by Friday's close.
Meanwhile, US Treasury yields saw an uptick, with the two-year rate rising by seven basis points to 4.02%, while the 10-year rate increased by 4.4 basis points, reaching 4.32%. In the realm of company updates, shares of Ulta Beauty ($ULTA) soared by 14%, marking the highest gain on the S&P 500 for the day.
Despite the beauty retailer's full-year guidance falling short of Wall Street's expectations, analysts at UBS see potential for positive earnings revisions in upcoming quarters. Crown Castle ($CCI) emerged as the second-best performer on the S&P 500, climbing 10%. The company made headlines by agreeing to divest its small cells and fiber solutions businesses for a combined total of $8.5 billion, following a strategic review that aimed to enhance shareholder value. Conversely, Abbott Laboratories ($ABT) faced challenges, with shares declining by 2.5%, marking the most significant loss on the S&P 500.
The company is embroiled in a retrial concerning allegations that its infant formula was harmful, resulting from prejudiced or erroneous rulings coming from a Missouri state court decision last year. In energy markets, West Texas Intermediate crude oil prices saw a rise, increasing by 1% to $67.18 per barrel, showcasing a mix of positive momentum in the energy sector amid broader economic fluctuations..