US Stocks Surge, Defying Fed Concerns; Dollar Notches Sixth Green Week: What's Driving Markets Friday?

U.S. stocks are exhibiting resilience amid mixed signals from Jackson Hole, with Federal Reserve Chair Jerome Powell reaffirming the Fed’s preparedness for further rate hikes if needed.

Yet Powell’s remarks seem to lack unanimous support from the board, as Philadelphia Fed President Patrick Harker signaled his preference for maintaining unchanged rates to prevent additional economic pressure, while Austan Goolsbee said the Fed debate is less about whether to hike rates again. Conversely, Cleveland Fed President Loretta Mester alluded to a more hawkish stance, indicating the Fed has more work to do and underscoring that rate cuts in 2024 are not on her horizon.

Market participants are opting for caution, increasing their bets on potential rate hikes. The market trajectory appears to favor an unaltered September meeting, setting the stage for a potential upward move in November, with the probability of a rate hike standing at 58%.

The U.S. dollar index was up 0.2% as of midday trading, on track to close its sixth straight week of gains, for the first time since May 2022.

Cues From Friday Trading

The S&P 500 rose 0.4% and the Dow gained 0.5% while tech stocks exhibited more subdued gains, up 0.1%. Small caps in the Russell 2000 edged 0.2% higher.

US Index Performance On Friday

Thursday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.3% higher to $438.28.
• The SPDR Dow Jones Industrial Average ETF (NYSE:DIA) rose 0.4% to $342.49.
• The Invesco QQQ Trust (NASDAQ:QQQ) held steady at $361, according to Benzinga Pro data.

Ten out of 11 S&P 500 sectors exhibited positive performance for the day:

• The Energy Select Sector SPDR Fund (NYSE:XLE) was the outperformer for the second day in a row, up 1.3%.
• The Communication Services Select Sector SPDR Fund (NYSE:XLC) was the laggard, down 0.9%.

Upcoming Economic Data:

The University of Michigan’s consumer sentiment was adjusted downward to 69.5, revising the preliminary figure of 71.2. The index for expectations declined from 67.3 to 65.5, while the current conditions subindex dropped from 77.4 to 75.7 . Inflation projections for the year were upwardly revised from 3.3% to 3.5%, while the five-year outlook was adjusted higher from 2.9% to 3% .

See also: How To Trade Futures

Stocks In Focus:

• Affirm Holdings, Inc. (NASDAQ:AFRM) rallied over 30% following the release of its quarterly results.
• NVIDIA Corp. (NASDAQ:NVDA) fell 3.4% after closing flat on Thursday in response to its astonishing second-quarter results.
• Hasbro Inc. (NASDAQ:HAS) rose 5%, marking the top performance among the S&P 500 components.
• Marvell Technology, Inc. (NASDAQ:MRVL) fell about 7% despite a second-quarter beat.
• Hawaiian Electric Industries, Inc. (NYSE:HE) plunged about 16% after S&P downgraded the company and all its subsidiaries from "BB-" to "B-," citing the concerns about its access to capital markets in the aftermath of the Maui wildfire.

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 0.8%, with a barrel of WTI-grade crude trading at $79.50. The United States Oil Fund ETF (NYSE:USO) was 0.9% higher to $72.  

Treasury yields were mostly flat, with the 10-year yield at 4.24% and the two-year yield at 5.05%. The iShares 20+ Year Treasury Bond ETF (NYSE:TLT) was 0.3% higher for the day. 

The dollar rose, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:UUP), up 2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust (NYSE:FXE), was 0.2% lower to 1.0797.

European equity indices had a green session. The SPDR DJ Euro STOXX 50 Etf  (NYSE:FEZ) rose 0.6%. 

Gold edged 0.4% lower to $1,910/oz, while silver rose 0.2% to $24.13. Bitcoin (CRYPTO: BTC) was 1% lower to $25,930.

Staff writer Piero Cingari updated this report midday Friday. 

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