Traders work at the New York Stock Exchange on January 19, 2024.
Spencer Platt | Getty Images
The Dow Jones Industrial Average soared Friday on gains in Home Depot and Caterpillar as investors began to embrace some stocks outside of the tech bull market leaders this week.
The Dow added 247.15 points, or 0.62%, to close at 40,000.90. During the session, the 30-stock blue-chip index hit a new all-time high of 40,257.24 shares. This was the first time it topped 40,000 since it surpassed that round number milestone in late May. Home goods store added 1.7% to take the week’s gain to 7.5%. Caterpillar it added nearly 1.4% during the day.
The S&P 500 were higher by 0.55%, closing at 5,615.35 points. The Nasdaq Composite rose 0.63% and closed at 18,398.45 points.
In Thursday’s session, the S&P 500 posted its worst day since late April as investors sold their Big Tech winners in a major market reversal, pushing Nvidia lower by 5.6%. However, the stock of 30 Dow was the day’s best performer, rising 0.08% during the sell-off in the other major averages. On Friday, investors piled into the Dow industrials on hopes that slowing inflation will be followed by a rate cut by the Federal Reserve in September. The Dow rose 1.6% for the week. The catalyst was a report on Thursday that showed the consumer price index fell 0.1% in June.
“The strong growth story of artificial intelligence has been consuming, but it is not the only story in the market,” said David Russell, global head of market strategy at TradeStation. “Powell’s testimony this week and the CPI report remind investors that other catalysts can boost other types of companies. That’s especially true in a sector like utilities, which emerged as an AI play earlier this year and now can likely to benefit from interest rate cuts.”
Dow Jones Industrial Average, year to date
The Russell 2000 jumped 6% for the week after rising 1.1% on Friday, as investors see a so-called soft landing for the broader economy giving smaller companies a boost.
The market rallied even after weak reactions to banks’ second-quarter earnings. JPMorgan Shares were 1.2% lower, even though the bank posted second-quarter revenue that beat Wall Street expectations, driven by a rise in investment banking fees. Citi fell 1.8% despite a beat on the top and bottom lines in the second quarter.
Wells Fargo Shares fell 6% after the bank said net interest income, a key measure of how profitable loans are for banks, fell short of expectations in the second quarter.
A measure of wholesale inflation was slightly higher than expected on Friday, but Wall Street largely ignored those figures after Thursday’s most important consumer price report showed a slowdown in inflation.
Nvidia bounced 1.4% on Friday as investors couldn’t resist some of their favorite tech names selling off the day before.
The S&P 500’s nearly 18% gain for the year came largely from tech stocks. The technology sector has seen a 33% jump in 2024 and communication services has grown by 26%. No other major sector outperformed the benchmark.
