Overview
On Friday, the Nasdaq Composite closed higher, fueled by gains in mega-cap tech stocks as investors looked ahead to a pivotal earnings week. Tesla rose another 3.36% following its 22% surge on Thursday, with Amazon, Apple, and Microsoft also posting gains. Optimism surrounding the “Magnificent Seven” tech stocks, bolstered by Tesla’s upbeat forecast, drove much of the day’s rally in tech.
Meanwhile, the Dow Jones Industrial Average fell as bank stocks slipped, with Goldman Sachs and New York Community Bancorp declining. The S&P 500 ended nearly flat, dragged down by losses in utilities and other defensive sectors. Rising Treasury yields and anticipation of upcoming employment data also weighed on investor sentiment.
- Dow Jones Industrial Average: Fell 0.61% to 42,114.40
- S&P 500: Lost 0.03% to 5,808.12
- Nasdaq Composite: Gained 0.56% to 18,518.61
Fear & Greed Index
Neutral – Investor sentiment is mixed, with gains in tech balanced by caution around rising yields, upcoming earnings, and election uncertainties.
Sector Performance
- Winners:
- Technology: Strong performance from Tesla, Amazon, Apple, and Microsoft lifted the Nasdaq. Nvidia briefly surpassed Apple to become the world’s most valuable company, showcasing strong AI-driven demand.
- Consumer Discretionary: Positive Tesla earnings bolstered this sector, particularly among EV and AI-related stocks.
- Losers:
- Utilities: Declined sharply, as rising yields made defensive investments less attractive.
- Financials: The Dow suffered from declines in bank stocks, with Goldman Sachs down 2.27% and New York Community Bancorp falling 8.26% due to commercial real estate loan losses.
Key Movers
- Tesla (TSLA): Increased 3.36% as optimism grew around its future sales growth.
- Nvidia (NVDA): Gained slightly, briefly surpassing Apple in market cap amid strong AI-driven demand.
- Capri Holdings (CPRI): Plummeted 48.89% after a judge blocked its merger with Tapestry, while Tapestry rose 13.54%.
- Goldman Sachs (GS): Dropped 2.27% as investors took profits after a recent rally.
Economic Data
- Treasury Yields: The 10-year Treasury yield ticked higher, near a three-month high, as investors awaited employment data for further Fed guidance.
- Federal Reserve Outlook: Investors are pricing in a possible 25-basis-point rate cut in November, though economic data may impact expectations.
Outlook
Next week is set to be crucial, with major tech earnings reports from Alphabet, Apple, and Microsoft, along with key economic data, including the U.S. nonfarm payrolls report. Rising Treasury yields and the impending U.S. presidential election add additional layers of uncertainty. Investors will closely watch for signs of resilience in tech stocks and monitor any economic indicators that may influence Federal Reserve policy.