US Stocks Rise on Strong Business Activity

The Dow Jones Index gained 555 points or 1.05 percent on Friday to close at 53315 points. Gains were led by Goldman Sachs (3.94%), Merck (2.27%) and Salesforce (1.91%).

US stock indices closed higher on Friday, pausing the week’s losses on solid economic data. The S&P 500 gained 0.4%, the Nasdaq 100 rose 0.3%, and the Dow added 518 points. Equities advanced after a report showed US business activity grew at its fastest pace in more than four years. Meanwhile, markets continued to assess a recent surge in bond yields driven by inflation and fiscal concerns. Long-dated Treasury yields remained near levels seen before the Treasury announced a larger bond buyback, while the dollar extended its decline. Hyperscalers gained, with Alphabet up 1.1%, Microsoft adding 0.4% and Meta rising 0.8%. Chipmakers traded mixed, with Nvidia down 1%, Micron losing 0.8% and Intel retreating 2.2%. Walmart fell over 10% on the week after a rare earnings miss weighed on its outlook and raised concerns over US consumers.

The outlook on global interest rates and long-term sovereign yields will remain in the market's forefront as investors grapple with elevated energy prices, increasing deficit spending, and soaring corporate credit issuance. The Fed's monetary policy and its holding of duration will be updated with FOMC speeches at the Jackson Hole Symposium. Also, earnings by Nvidia will remain a bellwether for global AI demand in a period that sees ambitious outlooks clash against some skepticism of overspending on infrastructure. Personal income and spending, PCE prices, and durable goods data for July, in addition to the annual revisions to nonfarm payrolls, are awaited. Elsewhere, the ECB will release its meeting accounts. Germany is due to publish consumer and business confidence indicators while Spain and France are set for CPI prints. Meanwhile, Japan will release consumer confidence and its unemployment rate, while rate decisions are due in Korea, the Philippines, and Thailand.