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U.S. Stocks Edge Higher Amid Weekly Declines and Economic Uncertainty

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U.S. stocks saw modest gains on Friday, though all three major indexes—the Dow Jones Industrial Average, S&P 500, and Nasdaq—remained on track for small weekly losses. This movement followed a turbulent start to the week, driven by fears of a potential recession and the unwinding of a global yen-funded carry trade. Despite recent rallies, Wall Street was unable to fully recover from Monday’s steep decline.

The technology sector led the day’s gains, yet both the S&P 500 and Nasdaq were poised for a fourth consecutive week of losses. Meanwhile, the Cboe Volatility Index (VIX), often referred to as Wall Street’s “fear gauge,” decreased on Friday after spiking to 65.73 earlier in the week.

Monday’s market drop was largely attributed to last week’s sharp sell-off, which was triggered by a disappointing July jobs report that fueled recession concerns. These worries were exacerbated by the Bank of Japan’s interest rate hike on July 31, which resulted in a significant appreciation of the yen, a currency often used in carry trade investments. This led investors to unwind their positions, contributing to market instability.

Market participants remain on edge as they anticipate further uncertainty in the coming weeks, particularly in the lead-up to the Federal Reserve’s next policy meeting on September 17-18. Current market sentiment, as reflected in the CME Group’s FedWatch Tool, suggests a 55% chance that the Fed will reduce interest rates by 50 basis points, with a 25 basis point cut seen as having a 45% probability.

On the day, the Dow Jones Industrial Average rose by 27.13 points (0.07%) to 39,473.62, the S&P 500 gained 21.67 points (0.41%) to 5,340.98, and the Nasdaq Composite added 72.48 points (0.44%) to close at 16,732.50.

Investors are now looking ahead to next week’s reports on U.S. consumer prices and retail sales for July, which could provide further insights into the likelihood of a soft landing for the U.S. economy. On Thursday, Federal Reserve officials expressed confidence that inflation was cooling sufficiently to justify upcoming interest rate cuts, with the timing and size of these cuts likely to depend on forthcoming economic data.

In individual stock news, Take-Two Interactive Software saw gains as it forecasted growth in net bookings for fiscal years 2026 and 2027, while Expedia advanced after surpassing analysts’ expectations for second-quarter profits.

On the NYSE, advancing issues outnumbered decliners by a 1.22-to-1 ratio, while on the Nasdaq, decliners outpaced advancers with a 1.26-to-1 ratio. The S&P 500 recorded 13 new 52-week highs and 3 new lows, while the Nasdaq registered 48 new highs and 142 new lows.

 

Wall Street Rallies as Jobs Data Eases Economic Slowdown Fears

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Wall Street’s major indexes surged nearly 2% on Thursday, fueled by a stronger-than-expected jobs report that alleviated concerns about a looming economic slowdown. The data revealed a sharper-than-anticipated drop in new unemployment benefit applications last week, dispelling fears that the labor market was unraveling.

This positive shift in sentiment helped stabilize megacap and growth stocks, which had been in free fall following a disappointing July jobs report that had sparked recession concerns. Nvidia led the gains with a 4.4% surge. According to Skyler Weinand, Chief Investment Officer at Regan Capital, “Just because the labor market is cooling off doesn’t mean we’re entering into a recession.”

All major S&P sectors saw gains, with information technology and communication services leading the charge. Global markets also began to recover from the earlier week’s volatility, triggered by concerns over interest rate hikes and weak demand in the U.S. Treasury market.

J.P. Morgan raised the likelihood of a U.S. recession by the end of the year to 35%, up from 25%, citing reduced pressure in the labor market.

By late morning, the Dow Jones Industrial Average had risen 589.53 points (1.52%) to 39,352.98, the S&P 500 gained 99.37 points (1.91%) to 5,298.87, and the Nasdaq Composite climbed 360.42 points (2.23%) to 16,556.23.

On the earnings front, Eli Lilly jumped 7.9% after raising its annual profit forecast, driven by the success of its weight-loss drug Zepbound, which surpassed $1 billion in quarterly sales. Under Armour surged 19.2% following a surprising first-quarter profit. Conversely, Bumble saw its shares plummet 32.6% after slashing its annual revenue growth forecast, while Warner Bros Discovery and Monster Beverage also faced significant declines.

Investors are now looking ahead to comments from Richmond Fed President Thomas Barkin for insights into the Federal Reserve’s next moves.

 

Tech Surge and BOJ’s Dovish Comments Boost Wall Street

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Wall Street’s main indexes advanced on Wednesday, supported by gains in megacap stocks and a dovish shift by Japan’s top policymaker after a surprise interest rate hike last week that had triggered volatility in global markets. Major technology stocks saw gains of at least 2%, led by Amazon.com rising 2.6%, though Tesla dipped nearly 1%. All major S&P sectors were trading higher, with information technology and energy leading the gains. Michael Landsberg, chief investment officer at Landsberg Bennett Private Wealth Management, noted, “Many investors are sitting on big gains in tech stocks … so it’s important for investors to right size their risk,” while predicting continued volatility.

The CBOE Volatility Index, Wall Street’s fear gauge, declined to 23.09 points from a high of 65.73 on Monday. A surprise rate hike by the BOJ on July 31 to a level unseen in 15 years had sparked a global stock rout as investors unwound their sharp yen carry trade positions. However, on Wednesday, global equity markets extended their rebound after Bank of Japan Deputy Governor Shinichi Uchida indicated the central bank would not raise rates when financial markets are unstable, pushing the yen lower and boosting market sentiment.

By 11:22 a.m. ET, the Dow Jones Industrial Average rose 350.48 points, or 0.90%, to 39,348.14, the S&P 500 gained 71.02 points, or 1.36%, to 5,311.05, and the Nasdaq Composite gained 268.20 points, or 1.64%, to 16,635.06. The S&P 500 and the Nasdaq ended Tuesday more than 1% higher following comments from Federal Reserve officials that eased recession worries and shifted the spotlight back to earnings.

Fortinet jumped 24.6% after raising its annual revenue forecast, while Airbnb slid 12.7% after forecasting third-quarter revenue below estimates and warning of shorter booking windows. Walt Disney fell 1.9% predicting a ‘moderation in demand’ at its theme parks, Super Micro Computer lost 16.3% after reporting quarterly adjusted gross margins below estimates, and Amgen fell 4.4% due to higher expenses offsetting revenue increases. The markets await further commentary on monetary policy from U.S. central bank officials next week, ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole event.