Traders work on the floor of the New York Stock Exchange on July 11, 2024.
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The Dow Jones Industrial Average rose to new highs on the back of gains in Home Depot and Caterpillar as investors began to embrace some stocks outside the tech bull market leader this week.
At Dow add 319 points, or 0.8%, to a new record above 40,000. It’s the first time it’s topped 40,000 since hitting the milestone in late May. Home Depot added 2% to bring its gain for the week to nearly 8%. Caterpillars increased by 1.8%.
At S&P 500 was 0.7% higher and rose above the 5,600 level again after falling below the threshold on Thursday. At Nasdaq Composite up 0.8%.
During Thursday’s session, the S&P 500 posted its worst day since late April as investors sold Big Tech winners in major market rotations, pushing Nvidia down by 5.6%. Deposit 30 Dow there was an outperformer, however, there, inching more by 0.08% during the sell-off in the other main average. The Dow continued to gain on Monday as investors jumped further into industrial names on the hope that slowing inflation will be followed by the Federal Reserve’s rate cut in September. The Dow is up 1.8% for the week. The catalyst was Thursday’s report showing the consumer price index declined 0.1% in June.
“The strong growth story in AI has been overwhelming, but it’s not the only story in the market,” said David Russell, head of global market strategy at TradeStation. “Powell’s testimony this week and the CPI report remind investors that other catalysts can boost other types of companies. This is especially true for sectors like utilities (this week’s leader), which emerged as AI plays earlier this year and now stand to benefit from rate cuts.”
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The Russell 2000 Index rose more than 6% for the week after a 1.5% gain on Friday as investors saw the so-called soft landing for the broader economy giving a boost to small companies.
Markets rallied even after a subdued reaction to banks’ second-quarter earnings. JPMorgan Shares were 1% lower even as the bank posted second quarter revenue higher than Wall Street’s expectations in the jump in investment banking fees. Citi The stock dipped 3% despite hitting above and below the line in the second quarter.
Wells Fargo Shares tumbled 7% after the bank said net interest income, a key measure of credit profitability for banks, fell short of expectations in the second quarter.
A reading of wholesale inflation came in slightly hotter than expected, but Wall Street generally ignored the figure after there was a report of more important consumer prices showing a slowdown in inflation.
Nvidia bounced 2% on Friday as investors couldn’t resist some of their favorite tech names having sold off the previous day.
The S&P 500’s 18% gain for the year has been largely led by tech stocks. The technology and communication services sector of both markets are up around 20% year-on-year. No other major sector outperformed the benchmark.
