WASHINGTON (dpa-AFX) - Stocks showed a lack of direction early in the session on Friday but moved notably higher over the course of the trading day. The major averages all showed strong moves to the upside following the substantial downturn seen during Thursday's session.
The major averages pulled back well off their best levels going into the end of the day but remained firmly positive. The Dow surged 493.15 points or 1.1 percent to 46,245.41, the Nasdaq advanced 195.03 points or 0.9 percent to 22,273.08 and the S&P 500 jumped 64.23 points or 1.0 percent to 6,602.99.
Despite the rebound on the day, the major averages all posted steep losses for the week. The Nasdaq plunged by 2.7 percent, the S&P 500 tumbled by 2.0 percent and the Dow slumped by 1.9 percent.
The strength that emerged on Wall Street may partly have reflected renewed optimism about the Federal Reserve lowering interest rates at its next monetary policy meeting in December.
CME Group's FedWatch Tool indicates the chances of a quarter point rate cut at the Fed's December meeting have soared to 71.5 percent from just 39.1 percent on Thursday.
The increased bets on a rate cut next month come following dovish remarks by New York Federal Reserve President John Williams.
During remarks at the Central Bank of Chile Centennial Conference, Williams described monetary policy as being 'modestly restrictive' and said he sees 'room for a further adjustment' to rates in the near term.
However, it is worth noting that the minutes of the latest Fed meeting revealed officials have 'strongly differing views' about whether to continue cutting rates in December.
Potentially adding to the optimism about the outlook for interest rates, the University of Michigan released a report showing decreases by both year-ahead inflation and long-run inflation expectations in November.
The advance by stocks may also have reflected bargain hunting on the final day of a difficult week for the markets, which saw the Nasdaq and the S&P 500 tumble to their lowest levels in over two months.
Sector News
Housing stocks turned in some of the market's best performances on the day, with the Philadelphia Housing Sector Index soaring by 4.0 percent.
Substantial strength was also visible among airline stocks, as reflected by the 3.0 percent surge by the NYSE Arca Airline Index.
Biotechnology, oil service, healthcare and computer hardware stocks also showed strong moves to the upside, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Friday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both tumbled by 2.4 percent, while South Korea's Kospi nosedived by 3.8 percent.
Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index slid by 0.8 percent, the French CAC 40 Index closed just above the unchanged line and the U.K.'s FTSE 100 Index inched up by 0.1 percent.
In the bond market, treasuries extended the upward move seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, slid 4.3 basis points to 4.063 percent.
Looking Ahead
Next week's trading may be impacted by reaction to the release of long-delayed U.S. economic data, including reports on retail sales, producer prices, and durable goods orders.
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