The S&P 500 just closed out its best week since February on Friday, following a rally of more than 2% this week. The major benchmark recovered from a Federal Reserve-induced swoon last week, ending at an all-time high on Friday.
"Stocks believe, as the Fed has told them, that the current sharp rise in inflation is temporary and thus policy removal will take place at a glacial pace. They took this cue and ran with it this week," Peter Boockvar, chief investment officer of Bleakley Advisory Group, told CNBC.
For the week, the Dow rose 3.4% and Nasdaq Composite climbed 2.4%. On Friday, the Dow gained 237 points, helped by a 15.5% jump in Nike's stock after stellar earnings for the shoe giant. The Nasdaq closed around the flat line amid an uptick in U.S. Treasury yields.
The gains came even as a key inflation indicator that the Fed uses to set policy rose 3.4% in May from a year earlier, the fastest increase since the early 1990s, the Commerce Department reported Friday. The reading matched the expectation from economists polled by Dow Jones. The core personal consumption expenditures price index rose 0.5% for the month, which actually was below the 0.6% estimate.
Banks lifted the major averages on Friday after a successful stress test from the Federal Reserve was announced Thursday. The central bank said all 23 institutions in the 2021 exam remained "well above" minimum required capital levels during a hypothetical downturn.
Post a Comment