U.S. stocks closed another winning week with the S&P 500 rising 0.2% and the Dow Jones Industrial Average gaining 0.3%. The Nasdaq composite edged down slightly following a discouraging report on U.S. consumer sentiment. The S&P 500 has climbed back within 0.6% of its record on hopes of Federal Reserve interest rate cuts and strong corporate profits reports. Companies like Gen Digital and Novavax saw significant stock price increases after positive earnings reports and deals with other companies.
Gen Digital reported better profits for the first three months of 2024, leading to a 15.3% jump in its stock price. The company also authorized a stock buyback program worth $3 billion. Novavax nearly doubled in value after announcing a deal with Sanofi that could be worth more than $1.2 billion. While some companies saw gains, Akamai Technologies experienced an 11% drop in its stock price despite beating profit expectations. The company cited a strong U.S. dollar and slowing industry traffic growth as reasons for their disappointing financial forecasts.
In the bond market, Treasury yields rose after a discouraging report on U.S. consumer sentiment, which indicated weakening sentiment and higher inflation expectations among consumers. The 10-year Treasury yield rose to 4.50%, but the movement was relatively modest compared to recent fluctuations. Traders are anticipating one or two interest rate cuts by the Federal Reserve this year. Federal Reserve Chair Jerome Powell’s comments about interest rate cuts have also helped lower yields. The U.S. economy seems to be finding a balance between economic growth and inflation control.
Stock markets abroad also showed positive performance, with London’s FTSE 100 rising 0.6% and Tokyo’s Nikkei 225 increasing by 0.4%. In London, the U.K. economy bounced back to growth at the start of the year, exceeding expectations and ending two consecutive quarters of economic decline. In Japan, strong auto exports reduced the nation’s trade deficit and generated solid returns on overseas investments. Overall, the stock market remains optimistic due to strong corporate earnings and expectations of Federal Reserve interest rate cuts.
