The closing bell on Wall Street brought positive news as US benchmark equity indexes wrapped up a robust trading session on Friday. Investors scrutinized the latest economic indicators, including compelling data from a consumer sentiment survey that outstripped forecasts for August. The Dow Jones Industrial Average, along with the S&P 500 and the Nasdaq Composite, all registered a 0.2% increase, underscoring a synchronized rally across these pivotal indices.
Specifically, the Dow concluded the day at 40,659.8, the S&P 500 climbed to 5,554.3, and the Nasdaq finished strong at 17,631.7. Among the sectors, financials emerged as the major gainers, whereas the industrial sector experienced a marked downturn. Over the preceding week, the Nasdaq exhibited exceptional performance, soaring 5.3%, with the S&P 500 and Dow following suit, advancing 3.9% and 2.9%, respectively.
This week-on-week improvement reflects a broader recovery trend in the equities market, hinting at renewed investor confidence. In the realm of economic analysis, recent reports revealed a noteworthy increase in US consumer sentiment, which ascended to 67.8 this month, a rise from July's figure of 66.4, according to preliminary results from the University of Michigan's Surveys of Consumers.
Analysts anticipated a reading of 66.9 based on a Bloomberg compiled survey. Director of the Surveys of Consumers, Joanne Hsu, indicated that consumer expectations, notably in terms of personal finances and the five-year economic forecast, showed considerable strengthening, achieving its apex in four months.
Interestingly, the survey highlighted that the inflation expectations held steady across one- and five-year horizons, reflecting a stable outlook on future price movements for consumers. Shifting focus to housing data, the Census Bureau along with the Department of Housing and Urban Development reported a decrease in housing starts for the month.
This decline was primarily attributed to reductions in single-family housing projects. However, BMO pointed out that despite the disappointing July data on starts and permits, the pronounced decline in mortgage rates, should it persist, would likely enable the residential market to regain momentum in the upcoming months. In bond markets, the two-year yield dipped by 4.5 basis points to settle at 4.06%, while the 10-year yield experienced a marginal loss of 4.3 basis points, closing at 3.88%. From the corporate front, Tapestry, a luxury fashion powerhouse, saw its shares surge by 3.1%, positioning it among the top gainers on the S&P 500.
The company delivered robust fiscal fourth-quarter results that exceeded expectations, prompting an optimistic forecast for earnings in 2025. Madison Square Garden Entertainment also made headlines, with its shares climbing 4.8% following a fiscal fourth-quarter profit surge year-on-year. This upswing was fueled by ramped-up event-related revenues in conjunction with a boost in food and beverage sales that contributed to a double-digit gain at the topline. Conversely, Palo Alto Networks faced challenges as its shares registered a 2.7% decline on the Nasdaq, marking it as one of the weakest performers on the S&P 500.
Market watchers are keenly anticipating the company’s fiscal fourth-quarter results, which will illuminate its 2025 outlook as it advances its 'platformization' strategy. Notably, only 900 of Palo Alto's top 5,000 clients have transitioned fully to its platform approach, yet forecasts suggest this change is likely to accelerate in pace. Amcor also suffered a setback, with shares plummeting 3.7%, the most significant drop on the S&P 500 for the day.
The decline followed the company’s disappointing fiscal fourth-quarter sales results that missed Wall Street expectations. In the commodities market, West Texas Intermediate crude oil prices slipped 1.8% to $76.76 per barrel, largely influenced by reduced processing rates from Chinese refineries amid lackluster demand, as reported by Reuters. On a brighter note, precious metals saw gains, with gold jumping 2.2% to $2,547.30 per troy ounce and silver gaining 2.1% to $29.45 per ounce.
Indeed, spot gold surpassed the $2,500 mark for the first time this afternoon, eclipsing its recent record set in July. The price of gold has surged over 20% this year, driven by geopolitical uncertainties, anticipated monetary policy easing from the US Federal Reserve, and a 'strong appetite' from central banks, as noted by ING in a recent report..