S&P 500, Nasdaq close at record highs after Powell's dovish remark

The S&P 500 and tech-heavy Nasdaq closed the trading week at all-time highs on Friday, August 27, after Federal Reserve Chairman Jerome Powell cautioned against overreaction to inflation, reiterating that the bank would start tapering monetary support later this year.

The S&P 500 was up 0.88% to 4,509.37. The Dow Jones rose 0.69% to 35,455.80. The NASDAQ Composite gained 1.23% to 15,129.50, and the small-cap Russell 2000 was up 2.85% to 2,277.15.

Powell downplayed inflation at Fed's Jackson Hole symposium on Friday, stating there was no need for overreaction, but the bank would consider withdrawing support by the year-end. Currently, the bank injects US$120 billion every month into the economy through its bond-buying program.

Markets were anticipating a clear timeline on stimulus exit and decision on interest rates.

On Friday, new economic data released by the Commerce Department showed consumer spending rose marginally by 0.3% in July after increasing 1.1% in the prior month, indicating the economic recovery may be losing momentum. Consumer spending is a major component of US GDP. Economists believe the rising delta cases might have slowed down the recovery.

Energy, basic materials, and technology stocks were the biggest gainers on S&P 500 Friday. Nine of the 11 index segments stayed in the green. Utilities and healthcare stocks traded flat.

In corporate news, Big Lots Inc. (BIG) stocks slipped 4.96% in intraday trading after reporting weaker-than-expected quarterly results. Its net sales fell 11.4% YoY to US$1.45 billion in Q2, 2021.

Stocks of Manchester United plc (MANU) soared 6.74% after footballer Cristiano Ronaldo’s plans to rejoin the iconic club gained momentum after Manchester brokered a deal with Juventus Football Club for his transfer.

Software company Workday Inc. (WDAY) stock rose 9.42% after reporting strong quarterly earnings the previous day. Its total revenue surged 18.7% YoY to US$1.26 billion in Q2 of FY 2022.

In the technology sector, NVIDIA Corporation (NVDA) rose 2.53%, ASML Holdings N.V. (ASML) increased by 2.72%, and Adobe Inc. (ADBE) rose 1.05%. Intel Corporation (INTC) and Broadcom Inc. (AVGO) advanced 1.36% and 2.15%, respectively.

In the energy sector, Exxon Mobil Corporation (XOM) rose 1.89%, Chevron Corporation (CVX) gained 1.37%, and PetroChina Company Limited (PTR) gained 2.66%. TotalEnergies SE (TTE) and BP p.l.c. (BP) surged 2.29% and 2.65%.

In communication stocks, Alphabet Inc. (GOOGL) soared 1.81%, Facebook Inc. (FB) gained 2.28%, and The Walt Disney Company (DIS) rose 2.04%. Netflix, Inc. (NFLX) and Snap Inc. (SNAP) advanced 1.60% and 2.18%, respectively.

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Top Gainers

Top performers on S&P 500 included Occidental Petroleum Corp (6.92%), Cabot Oil & Gas Corp (6.25%), APA Corp (US) (5.94%), Freeport-McMoRan Inc (5.88%). On NASDAQ, top performers were Vinco Ventures Inc (80.89%), Gambling.com Group Ltd (66.94%), NeuroMetrix Inc (65.60%), Aterian Inc (47.22%). On Dow Jones, Dow Inc (2.72%), Boeing Co (2.42%), Walt Disney Co (2.03%), American Express Co (1.90%) were the leaders.

Top Losers

Top laggards on S&P 500 included Moderna Inc (-4.52%), Dollar Tree Inc (-2.77%), Autozone Inc (-2.54%), Advance Auto Parts Inc (-2.39%). On NASDAQ, Effector Therapeutics Inc (-21.37%), Aerpio Pharmaceuticals Inc (-21.21%), Cassava Sciences Inc (-17.66%), Pro-Dex Inc (-14.06%). On Dow Jones, Walmart Inc (-0.56%), Salesforce.Com Inc (-0.47%), Merck & Co Inc (-0.35%), Cisco Systems Inc (-0.30%) were the laggards.

Volume Movers

Top volume movers were Apple Inc (13.42M), Bank of America Corp (12.16M), Advanced Micro Devices Inc (9.67M), Ford Motor Co (8.54M), AT&T Inc (8.05M), Support.com Inc (39.48M), Vinco Ventures Inc (23.99M), NeuroMetrix Inc (13.08M), Option Care Health Inc (12.68M), Naked Brand Group Ltd (8.36M).

Also Read: Peloton (PTON), Big Lots (BIG) stocks decline after quarterly earnings

Futures & Commodities

Gold futures were up 1.42% to US$1,820.75 per ounce. Silver increased by 2.23% to US$24.075 per ounce, while copper rose 1.68% to US$4.3190.

Brent oil futures increased by 2.11% to US$71.66 per barrel and WTI crude was up 1.93% to US$68.72.

Bond Market

The 30-year Treasury bond yields was down 0.97% to 1.922, while the 10-year bond yields fell 2.50% to 1.310.

US Dollar Futures Index decreased by 0.41% to US$92.692.