Magnificent 7 Stocks Propel S&P 500, Nasdaq 100 To Record Highs As Jobs Data Fuels Rate Cut Bets; Gold Miners Rally: What's Driving Markets Friday?

Author: Piero Cingari | July 05, 2024 01:45pm

S&P 500 and Nasdaq 100 indices surged to new all-time highs on Friday, driven primarily by a rally in Magnificent Seven stocks, which collectively reached a market capitalization exceeding $16 trillion.

The Roundhill Magnificent Seven ETF (NYSE:MAGS) increased by 1.4% on Friday, boosting its weekly gain to 7.7%, marking the strongest weekly performance since the fund’s inception.

As mega-cap tech stocks attracted larger gains, blue-chip stocks held steady, while small caps fell.

In June, the U.S. labor market showed signs of cooling despite a higher-than-expected increase in non-farm payrolls, due to previous downward revisions, a rise in the unemployment rate, and slower wage growth.

Economists have increasingly urged the Federal Reserve to initiate interest rate cuts, with September seen as the most likely starting point.

Traders quickly adjusted their expectations for rate cuts, assigning a 76% probability to a September move and now fully pricing in two rate cuts by the end of the year.

Treasury yields declined across the board, with the 2-year yield dropping by 7 basis points to 4.62%, and the 10-year yield falling by 6 basis points to 4.28%.

Gold prices advanced by 1.1%, fueling a rally in gold mining stocks, which outperformed other equity sectors on Friday. The VanEck Gold Miners ETF (NYSE:GDX) has surged nearly 7% over the last two sessions, marking its strongest two-day performance since early March.

In other markets, UK small-cap stocks, tracked by the iShares MSCI United Kingdom Small-Cap ETF (NYSE:EWUS), rallied 1.4% following a landslide victory for the Labour Party in the legislative elections, ending 14 years of Conservative rule.

Cryptocurrency markets were volatile on Friday. Bitcoin (CRYPTO: BTC) prices hit an intraday low of $53,550 before recovering to $56,430.

Friday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Nasdaq 100	20,344.47	0.8%
S&P 500	5,553.10	0.3%
Dow Jones	39,250.89	-0.1%
Russell 2000	2,020.45	-0.7%

Updated at 3:05 PM ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.4% higher to $553.55.
The SPDR Dow Jones Industrial Average (NYSE:DIA) was flat at $392.70.
The tech-heavy Invesco QQQ Trust (ARCA: QQQ) was 0.9% higher to $495.20.
Sector-wise, the Communication Services Select Sector SPDR Fund (NYSE:XLC) outperformed, up by 1.4%, while the Energy Select Sector SPDR Fund (NYSE:XLE) lagged, falling 1.7%.

Friday’s Stock Movers

Meta Platforms Inc. (NASDAQ:META) rallied 4.3%, marking the strongest daily performance since early February.
Chipmakers ARM Holdings Inc. (NASDAQ:ARM) and Advanced Micro Devices Inc. (NASDAQ:AMD) rocketed 5.7% and 4.8%, respectively.
Macy’s Inc. (NYSE:M) rallied 8.8% after rumors that Arkhouse Management and Brigade Capital Management increased offers to buy Macy’s remaining ownership.
Airline stocks declined, with budget carriers suffering the most significant losses following downgrades on Friday due to weakening fare trends. Spirit Airlines, Inc. (NYSE:SAVE) dropped 6.9%, Southwest Airlines Company (NYSE:LUV) fell 4.5%, and United Airlines Company (NYSE:UAL) decreased by 3.2%.