Wall Street Eyes Sixth Positive Session On Upbeat Economic Data, Bonds Fall As Traders Lose Conviction In Large Rate Cuts (CORRECTED)

Author: Piero Cingari | August 15, 2024 02:29pm

Editor’s note: This story has been updated to correct a subheading on Thursday’s stock movers.

Thursday saw one of the most pronounced risk-on sessions in Wall Street’s rebound from the selloff earlier in the month, as investors cheered the latest economic data, suggesting that earlier recession fears were likely overblown.

Small-cap stocks outperformed their larger counterparts, with the Russell 2000 index soaring nearly 3% for its best day in a month. Both the S&P 500 and Nasdaq 100 are on track to extend their winning streaks to six consecutive sessions.

Robust retail sales figures for July, far exceeding expectations, and a decline in initial jobless claims contributed to the market’s enthusiasm.

Retail sales figures released for July showed a 1% month-over-month increase, significantly higher than the 0.3% expected by analysts and a sharp rebound from June’s stagnation. This data, coupled with a decrease in initial unemployment claims last week to 227,000, provided a strong signal the U.S. economy might be more resilient than previously thought.

The positive economic data led to a shift in expectations regarding future Federal Reserve actions. The likelihood of a 50-basis-point rate cut in September diminished, with traders now assigning a 73% probability to a smaller 25-basis-point cut.

As expectations for aggressive monetary easing faded, bond yields surged, causing a 1.1% decline in the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT). The U.S. dollar also strengthened, with the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP) rising 0.3%, bolstered by a widening yield differential that pushed the greenback up over 1% against the Japanese yen.

In commodities, gold edged up 0.4%, while silver saw a substantial 3% rally. Crude oil prices rose by 1.6%, closing at $77.60 per barrel. Bitcoin (CRYPTO: BTC) also experienced a 2% gain, reflecting the broader risk-on sentiment in the market.

Thursday’s Performance In Major US Indices, ETFs

Major Indices	1-day %chg
Russell 2000	3.0%
Nasdaq 100	2.3%
S&P 500	1.6%
Dow Jones	1.3%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 1.6% higher to $552.26.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) rose 1.3% to $405.32.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) rallied 2.4% to $473.46.
• The iShares Russell 2000 ETF (NYSE:IWM) rocketed 3% to $212.89.
• The Technology Select Sector SPDR Fund (NYSE:XLK) outperformed, up by 2.5%. The Real Estate Select Sector SPDR Fund (NYSE:XLRE) lagged, down by 0.3%.

Thursday’s Stock Movers

• Ulta Beauty Inc. (NASDAQ:ULTA) skyrocketed by 12% after Warren Buffett’s Berkshire Hathaway revealed a significant new investment of approximately $260 million in the company.
• Cisco Systems Inc. (NYSE:CSCO) rallied 7% after reporting stronger-than-expected results last quarter.
• Other stocks moving in reaction to earnings reports included Alibaba Group Holding Limited (NYSE:BABA), up 0.3%, AST SpaceMobil Inc. (NYSE:ASTS), up 43%, Deere & Company (NYSE:DE), up 6.6%, monday.com Ltd. (NASDAQ:MNDY), up 1.1%, JD.com, Inc. (NASDAQ:JD), up 4.4% and Walmart Inc. (NYSE:WMT), up 6.5%.
• Companies reporting after the close are Applied Materials, Inc. (NASDAQ:MAT), Coherent Corp. (NYSE:COHR) and H&R Block, Inc. (NYSE:HRB)

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Photo via Shutterstock.

Posted In: $BTC ASTS BABA COHR CSCO DE DIA HRB IWM JD MAT MNDY QQQ SPY TLT ULTA UUP WMT XLF XLK