Stocks rose on Friday as Wall Street looked to achieve a rare positive week in the first half of the year.
The Dow Jones Industrial Average rose 248 points, or 0.8%. The S&P 500 rose 0.9%, while the Nasdaq Composite advanced 1%.
These moves come as the stock market appears to have found some stability this week, at least in the short term. The S&P 500 is up 4% for the week, while the Nasdaq Composite is up 5% and the Dow is up 3%.
All three averages are looking to capture three-week loss streaks.
“It’s a relief measure,” Allianz correspondent Mohamed El-Erian said Friday on CNBC’s “Squawk Box.” “It’s a relief after a tough week, a tough six weeks, a tough year, and we have a relief run, and that’s really welcome.”
However, the company’s chief economic adviser noted worrying signs in the bond market, which is expanding “higher risks of a recession” as the Federal Reserve shifts to a more aggressive stance against inflation.
“The market is saying ‘Whoa, be careful,’ because the economy is weakening not only in the US, but around the world. So there are two different narratives now in the stock market and the bond market. The main issue is that and again, it’s the bond market that’s driving The Fed, not the Fed, is driving the market.”
Volatility may rise on Wall Street on Friday, as FTSE Russell completes its annual index rebalancing, changing the trillion-dollar makeup of tracking indexes. The days of rebalancing are usually accompanied by high trading volumes as well.
Among the biggest changes are the additions of tech companies like Meta and Netflix to the Russell 1000 Value Index after their shares plunged this year. Meta and Netflix shares rose 2.6% and 1.2%, respectively.
On the corporate front, FedEx shares rose despite a mixed fourth-quarter report after the logistics company gave an upbeat earnings outlook.
Economic data will be the main focus going forward, as investors try to determine whether or not the US economy is in a recession. New home sales data is due at 10 AM ET and will follow the University of Michigan’s final consumer confidence report for June later in the day.
The consumer sentiment reading could be especially important to investors, as Federal Reserve Chair Jerome Powell said a sudden drop in the preliminary reading — accompanied by a sharp rise in inflation expectations — was one of the reasons the central bank raised its benchmark interest rate by three-quarters of a percentage point in earlier this month.
“Recession talk remains the focal point of Wall Street and that means any stock market recovery is likely to be short-lived,” Ed Moya, chief market analyst at Oanda, said in a note. “Wall Street won’t have any answers anytime soon to the questions about when inflation will peak, when we will see a recession, and how far the Fed will raise interest rates?”