S&P 500 caps off its best week of the year after strong economic data
- The S&P 500 clinched its best week of the year as investors cheered the latest economic data.
- Data on Friday showed consumer sentiment increased in August for the first time in five months.
The S&P 500 closed its best week of 2024, rising 3.9% over five days. The big sell-off earlier this month was erased by a flurry of strong data points boosting the case for a soft landing.
The S&P 500 and Nasdaq edged 0.2% higher on Friday, while the Dow Jones Industrial Average rose 97 points.
The 10-year yield fell three basis points to 3.89%, down six for the week as investors dialed back bets for steeper rate cuts from the Federal Reserve.
Kicking off the week were two fresh inflation readings showing pricing pressure is cooling in the US economy, with consumer inflation coming in below 3% for the first time in three years.
That was followed by a surprise 1% jump in retail sales and the lowest jobless claims figures in five weeks. Finally, on Friday, the University of Michigan consumer sentiment survey for August showed US consumers are feeling upbeat about the economy and their finances for the first time in five months.
Here's where US indexes stood at the 4 p.m. closing bell on Thursday:
- S&P 500: 5,554.25, up 0.2%
- Dow Jones Industrial Average: 40,659.76, up 0.2% (97 points)
- Nasdaq composite: 17,631.72, up 0.21%
Goldman Sachs analysts wrote in a note following the week's data updates that investors shouldn't lose faith in the face of intense volatility like the market saw this month. They say a soft landing is firmly in the cards for the US economy.
"From a market standpoint, we again think it makes sense to lean against extreme concerns and keep the faith in the modal view of continued expansion and decelerating inflation, rather than an imminent recession," the analysts wrote.
Next week, investors will be tuning into the economic symposium at Jackson Hole, Wyoming, for clues about what the next Federal Reserve policy will bring in September. Markets are feeling certain that the central bank will deliver its first rate cut, though the odds of a jumbo 50 basis point move have markedly declined after the week's data.
Here's what else is happening:
- New housing starts hit a COVID-era low as high prices scare away buyers.
- Russia has expanded its fleet of shadow tankers used to evade oil sanctions, a think tank said.
- Here's why gold prices just hit a new record.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil fell 1.8% to $76.72 a barrel. Brent crude, the international benchmark, declined 1.5% to $79.78 a barrel.
- Gold traded higher at $2,463.30.
- The 10-year Treasury yield dipped three basis points to 3.88%.
- Bitcoin rose 3.75% to $59,710.