US Stocks Recover from Market Rout, Ending Week in Green
The US stock market ended the week on a positive note, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all closing in the green. This comes after a tumultuous week that saw significant losses earlier on.
Market Performance
- The S&P 500 added 0.47% to finish at 5,344.16, recovering most of its losses from the market rout earlier in the week.
- The Dow Jones Industrial Average added 51.05 points, or 0.13%, to end at 39,497.54.
- The Nasdaq Composite gained 0.51% to close at 16,745.30.
- Week to date, the broad market index was lower by just 0.04%, while the Dow and the Nasdaq slipped 0.6% and 0.18%, respectively.
Oil Prices
- US crude oil gained more than 4% for the week as recession fears have eased and the risk of a wider war in the Middle East looms over the market.
- The West Texas Intermediate contract for September rose 0.85% to settle at $76.84 per barrel.
- The Brent October contract gained 0.63% to settle at $79.66 per barrel.
Company News
- Nvidia shares were marginally lower on Friday, failing to pull the stock out of negative territory for the week.
- Cybersecurity exchange-traded funds First Trust Nasdaq Cybersecurity ETF and Amplify Cybersecurity ETF are both higher by about 1.5% Friday.
- Akamai Technologies headed for its best day in more than half a decade after the cloud company's better-than-expected earnings report.
- E.l.f. Beauty's stock declined more than 15%, putting the cosmetics company on pace for its worst day since March 2020.
Earnings Season
- Corporate earnings season is entering its final stages, with more than 91% of S&P 500-listed companies having posted their quarterly financial results.
- Of those that have already reported, more than 78% have beaten Wall Street's expectations.
Market Analysis
- BTIG's chief market technician, Jonathan Krinsky, advised clients against getting their hopes up, suggesting that the market's gains may be capped.
- Bespoke Investment Group said that most individual stocks in the S&P 500 have stayed above a key technical level this week.
- R.J. O'Brien's managing director for global markets insights, Thomas Fitzpatrick, said that the market's reaction to Thursday's initial jobless claims data was overblown.
- BCA Research sees the S&P 500 collapsing about 30% to 3,750 sometime next year as the US enters a recession.
Asian Markets
- Asian markets managed to recoup some of the steep losses from earlier in the week, closing out the week with only modest declines.
- The Japanese equity benchmark Nikkei ended the week down just 2.5% for its fourth negative week in a row.
UBS
- UBS said not to get swept up in market volatility, sticking to its S&P 500 year-end target of 5,900.
Goldman Sachs
- Goldman Sachs upgraded Sociedad Quimica y Minera de Chile, the world's second-largest lithium producer by market value, to buy from neutral.
Market Update
- The S&P 500 rose 0.5% to 5,344.16, shaving off a brutal loss for the week to a barely registerable 0.04%.
- The Dow Jones Industrial Average added 51 points, or 0.1%, to 39,497.54.
- The Nasdaq composite climbed 0.5% to 16,745.30.
- The gains pulled the S&P 500 back within 5.7% of its all-time high set last month.
Volatility and Fears
- The market experienced a vicious return of volatility, with a measure of fear on Wall Street briefly surging toward its highest level since the 2020 COVID crash.
- Worries are still high about the strength of the US economy, with reports due next week on inflation, sales at retailers, and other measures of strength.
Company Earnings
- Expedia Group jumped 10.2% after delivering stronger results than forecast.
- Take-Two Interactive rose 4.4% after reporting better results than expected.
Global Markets
- Indexes rose for many other stock markets worldwide, which have also been frenetic since last week due to various factors.
- The value of the Japanese yen has strengthened, causing concerns about the impact on the global economy.
Wrap up
The US stock market ended the week on a positive note, recovering from the market rout earlier in the week. However, concerns about the strength of the US economy and the impact of global events on the market remain. Investors will be closely watching reports due next week on inflation, sales at retailers, and other measures of strength to gauge the direction of the market.
