The Dow Closes Powerfully Amid A Rough Week for Tech. Minor-Caps Impress.
On Friday, the Dow bounced back with zest after newly released data demonstrated effective control of inflation rates by the Federal Reserve. The Dow Jones Industrial Average surged by 654 points, a leap of 1.6%. Concurrently, the S&P 500 and the Nasdaq Composite made an upward move by 1.1% and 1% respectively, partly compensating for the steep fall earlier this week.
The Russell 2000 also displayed a strong performance as traders, inspired by recent indications of a slowdown in price inflation and a resilient economy, diversified their investments from dominant Artificial Intelligence-focused megacaps to smaller stocks which had been overlooked.
Both the Dow and the Russell had an upward trajectory for the week unlike the S&P 500 and Nasdaq Composite which saw a downturn. Tech stocks faced a hard time following Alphabet’s quarterly earnings report, triggering traders’ doubts over the previously high expectations of AI.
The forthcoming week will see a surge in activity with heavyweights like Microsoft, Meta Platforms, Amazon and Apple all announcing their results, among many others. In addition, the Federal Open Market Committee is set to reveal its July interest rate decision on Wednesday. Although it is largely anticipated that the rates will remain unchanged, any news regarding a potential cut in September could stir the markets. To top it all, Friday’s employment report will shed light on the current state of the labor market.
