[New York Stock Market] US Stocks Close Slightly Higher... Record Highest Weekly Gain This Year

The U.S. stock market closed slightly higher, recording its biggest weekly gain of the year.

[Image source=Reuters Yonhap News]

On the 16th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 40,659.76, up 96.70 points (0.24%) from the previous session. The S&P 500 index rose 11.03 points (0.20%) to 5,554.25, and the Nasdaq Composite index closed at 17,631.72, up 37.22 points (0.21%) from the previous session.

The three major indices have risen for four consecutive trading days since the 13th. In particular, the S&P 500 and Nasdaq indices have maintained a bullish streak for seven consecutive trading days. This seven-day winning streak is the longest since the previous seven-day rally that ended on the 10th of last month.

In terms of weekly gains, the Nasdaq rose 5.29% this week, marking its largest weekly increase since the week ending November 3, 2023. At that time, the Nasdaq's weekly gain was 6.61%. The S&P 500 also rose 3.93% this week, recording its largest weekly gain since November 3 of last year, when it gained 5.85% for the week.

The recent rapid rebound of the major indices is attributed to growing optimism that the U.S. economy is shaking off recession fears and moving toward a soft landing scenario. The July U.S. Producer Price Index (PPI), Consumer Price Index (CPI), and retail sales data released this week showed that U.S. consumer spending remains robust. This has provided the Federal Reserve (Fed) with the capacity to implement a more accommodative monetary policy without significant strain.

Mark Happel, Head of Global Asset Management Investments at UBS, said, "The indicators released this week were balanced?not too hot, not too cold." He added, "This helped ease concerns that a recession is imminent or that sticky inflation would hinder the Fed's ability to cut rates urgently."

Among major stocks, Nvidia continued its strong performance, rising 1.40%. Alphabet also showed gains around 1%. Conversely, Meta Platforms and Eli Lilly recorded declines of around 1%.

H&R Block, the largest tax services company in the U.S., surged more than 12% after reporting better-than-expected earnings, announcing a dividend increase, and a $1.5 billion share buyback plan.

Applied Materials, a semiconductor company, posted better-than-expected sales and earnings based on AI demand, but its stock fell by about 1%.

Bearish views emerged on Tesla (0.92%). Bernstein, a U.S. securities firm, maintained a "sell" rating on Tesla stock, citing a decline in Tesla's market share.

Meanwhile, according to the FedWatch tool of the Chicago Mercantile Exchange (CME), the federal funds futures market reflected a 72.5% probability of a 25 basis point (1 bp = 0.01 percentage point) rate cut in September near the close of trading.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.43 points (2.82%) to 14.80 compared to the previous session.