- US stocks surged more than 1% on Friday, capping the S&P 500’s weekly gains to 3%.
- The stock market surged as investors cheered the arrival of cooling inflation data.
- Cooling inflationary data would give the Fed some flexibility in its interest rate hike trajectory.
US stocks surged more than 1% on Friday, helping drive the S&P 500’s weekly gain to just over 3%.
The surge extended an almost two-month long rally from the S&P 500’s mid-June low as investors cheered the arrival of more data that suggests inflation is cooling off.
Import prices fell 1.4% in July, exceeding economist estimates for a decline of just 1%. The decline in July import prices represents the biggest drop since April 2020. Meanwhile, export prices fell 3.3% in July, far ahead of analyst estimates.
The decline in prices has been in-part driven by the ongoing decline in oil prices and other commodities. A cool-off in inflation is seen as risk-on for the stock market because it would give the Federal Reserve more flexibility in slowing down its interest rate hike trajectory.
Here’s where US indexes stood after the 4 p.m. ET closing bell on Friday:
One commodity continues to rise is European natural gas, which is on track for its fourth consecutive weekly gain as Russia’s war with Ukraine continues to spark an energy crisis that could get worse heading into the winter months.
Dutch TTF natural gas futures are up over 600% from a year earlier, according to ICE Exchange data.
In an attempt to limit the crisis from soaring natural gas prices, Europe is setting up floating liquefied natural gas terminals to better handle and process LNG imports.
Home prices have yet to see broad declines even as the housing market cools off due to higher mortgage rates. In fact, the median price for a single family home rose above $400,000 for the first time ever in the second quarter, according to the National Association of Realtors.
Chinese stocks were mostly lower on Friday after five Chinese companies said they would delist their shares from the US stock market. The companies include PetroChina, Sinopec, China Life Insurance, Aluminum Corp. of China, and Sinopec Shanghai Petrochemical.
Weakness in China’s housing market has led to value destruction this year, with more than $90 billion being wiped out in Chinese builders’ stock and bonds.
West Texas Intermediate crude oil fell 1.83% to $92.61 per barrel. Brent crude, oil’s international benchmark, dropped 1.54% to $98.20. Bitcoin fell 0.85% to $23,834. Ether prices fell 1.41% to $1,879.
Gold rose 0.19% to $1,810.60 per ounce. The yield on the 10-year Treasury fell four basis points to 2.84%.