In a notable shift, US benchmark equity indexes concluded higher on Friday, reflecting a thorough analysis of the latest economic data. A significant survey indicated that consumer sentiment rose more than expected in August, culminating in a more bullish outlook for the market. The three primary US indexes—the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite—each marked a 0.2% increase.
Specifically, the Dow ended at 40,659.8, while the S&P 500 reached a level of 5,554.3. The Nasdaq wrapped up the day at 17,631.7, showcasing resilience amid conflicting economic signals. Notably, financial stocks spearheaded the gains across sectors, contrasting sharply with industrials which recorded the most significant decline. Over the week, the Nasdaq surged by an impressive 5.3%, supported by a climbing S&P 500 which advanced by 3.9%.
The Dow also made substantial gains, increasing by 2.9%, reflecting a buoyant sentiment among investors following the latest economic indicators. Turning to economic metrics, the US consumer sentiment climbed to 67.8 this month, up from 66.4 in July, according to preliminary findings from the University of Michigan's Surveys of Consumers.
Notably, the consensus forecast was set at 66.9 in a survey fashioned by Bloomberg. This upward trend in consumer sentiment signals optimism regarding personal finances and broader economic conditions, with expectations about the economic outlook peaking at their highest level in four months, as stated by Joanne Hsu, Director of the Surveys of Consumers.
Interestingly, the survey also indicated that consumers' inflation expectations remained consistent over both one- and five-year time horizons, showcasing stability in outlook despite prevailing uncertainties. However, there's a contrasting narrative from the housing market. US housing starts witnessed a decline last month, predominantly influenced by sequential drops in single-family projects, as reported by the Census Bureau and the Department of Housing and Urban Development.
Commentary from BMO highlighted that while the July starts and permits data were considerably weak, the recent sharp decrease in mortgage rates, if it persists, may empower the residential market to regain momentum in the near future. Interest rates saw movements as well, with the US two-year yield falling by 4.9 basis points to 4.05%, whereas the yield for 10-year notes decreased by 4.5 basis points to 3.88%, indicating a shifting perspective among bond investors. In corporate news, shares of Tapestry ($TPR) climbed by 3.1%, making it one of the top gainers on the S&P 500 index.
This uptick followed the luxury fashion company reporting better-than-expected results for its fiscal fourth quarter and forecasting improved earnings for 2025 compared to the previous fiscal year. Madison Square Garden Entertainment ($MSGE) experienced a notable increase in its stock price, rising by 4.8% on Friday after announcing a year-over-year profit in its fiscal fourth quarter.
This profit surge was attributed to increased revenue from events, alongside strong food and beverage sales that contributed to double-digit topline growth. Conversely, Palo Alto Networks ($PANW) encountered the steepest decline on the Nasdaq, with shares down 2.7%. The firm’s fiscal 2025 outlook is poised to be a critical area of focus when it releases its fourth-quarter results on Monday, especially as it undertakes significant strides in its "platformization" strategy.
As highlighted by Wedbush Securities, only 900 out of Palo Alto's top 5,000 customers have yet fully transitioned to its platform approach, although growth in this area is anticipated. Finally, shares of Amcor ($AMCR) fell sharply, dropping by 3.7% after the company reported fourth-quarter sales that underperformed Wall Street expectations. On the commodities front, West Texas Intermediate crude oil dipped by 1.9%, closing at $76.68 per barrel on Friday.
This reduction is largely attributed to Chinese refineries significantly scaling back crude processing rates in July amid weak demand, according to Reuters. In contrast, gold prices climbed by 2.2%, reaching $2,545.90 per troy ounce, while silver prices rose by 2.1% to settle at $29.02 per ounce. Spot gold even exceeded $2,500 an ounce Friday afternoon, establishing a new record beyond its previous high achieved in July.
As ING reported, the yellow metal's price trajectory reflects an upward trend exceeding 20% this year, propelled by geopolitical uncertainties, expectations of a forthcoming easing of monetary policy by the US Federal Reserve, and a robust demand from central banks. This multifaceted economic landscape offers both challenges and opportunities for investors navigating the financial markets..