[NEW YORK] Wall Street extended its rally on Friday (Jun 27), sending S&P 500 and Nasdaq to all-time closing highs as trade deal hopes fuelled investor risk appetite and economic data helped solidify expectations for rate cuts from the US Federal Reserve.
Stocks pared gains after US President Donald Trump terminated trade negotiations with Canada in response to its digital tax on technology companies.
Even so, all three major US stock indices posted weekly gains. Upon reaching its record closing high, the tech-heavy Nasdaq confirmed it entered a bull market when it touched its post “Liberation Day” trough on Apr 8.
The blue-chip Dow remained 2.7 per cent below its record closing high reached on Dec 4.
“This market’s been pretty resilient,” said Chuck Carlson, chief executive at Horizon Investment Services in Hammond, Indiana. “Investors are riding momentum and looking for breakouts.”
“They don’t want to get caught on the wrong side of this thing,” Carlson added. “Many investors already have missed out. And now you have the S&P flirting with an all-time high.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The Personal Consumption Expenditures report from the Commerce Department showed consumer income and spending unexpectedly contracted in May. And while tariffs have yet to affect price growth, inflation continues to hover above the Fed’s 2 per cent annual inflation target.
A separate report from the University of Michigan confirmed consumer sentiment improved this month, but remains well below December’s post-election bounce.
Financial markets have priced in a 76 per cent likelihood that the Fed will implement its first rate cut of the year in September, with a smaller, 19 per cent probability of a rate cut coming as soon as July, according to CME’s FedWatch tool.
Washington and Beijing reached an agreement to expedite rare-earth shipments from China to the US, a White House official said, well ahead of the Jul 9 expiration of the 90-day postponement of Trump’s “reciprocal” tariffs.
Additionally, US Treasury Secretary Scott Bessent said the administration’s trade deals with 18 of the main US trading partners could be done by the Sep 1 Labor Day holiday.
The Dow Jones Industrial Average rose 432.43 points or 1 per cent to 43,819.27, the S&P 500 gained 32.05 points or 0.5 per cent to 6,173.07 and the Nasdaq Composite gained 105.55 points or 0.5 per cent to 20,273.46.
Among the 11 major sectors of the S&P 500, consumer discretionary enjoyed the biggest percentage gain, while energy shares were the laggards. Chipmaker Micron’s MU.O upbeat forecast revived investor confidence in artificial intelligence-related stocks, while Nvidia NVDA.O rose 1.8 per cent, edging closer to US$4 trillion market capitalisation after reclaiming its position as the world’s most valuable company.
Nike’s shares NKE.N jumped 15.2 per cent after forecasting a smaller-than-expected drop in first-quarter revenue. Advancing issues outnumbered decliners by a 1.29-to-1 ratio on the NYSE.
There were 347 new highs and 55 new lows on the NYSE. On the Nasdaq, 2,111 stocks rose and 2,342 fell as declining issues outnumbered advancers by a 1.11-to-1 ratio.
The S&P 500 posted 35 new 52-week highs and six new lows while the Nasdaq Composite recorded 101 new highs and 68 new lows.
Volume on US exchanges was 22.07 billion shares, compared with the 18.27 billion average for the full session over the last 20 trading days. REUTERS
