Key Takeaways:
- S&P 500 rises 1.1% to 7,500.58, erasing prior session's losses
- Nasdaq jumps 1.9% as Apple, Nvidia, Intel each gain more than 3%
- 10-year Treasury yield falls 10bps to 4.44% as oil prices slide
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Nasdaq surges 1.9% as tech stocks rally on easing oil prices
The Nasdaq composite surged 1.9% to 26,517.93, leading a broad market rally as oil prices eased and bond yields fell.
"Lower oil prices remove a key inflation worry and give the Fed more room to hold rates steady," said Adam Turnquist, chief technical strategist at LPL Financial.
The S&P 500 added 80.48 points, or 1.1%, to 7,500.58, while the Dow Jones Industrial Average rose 72.15 points, or 0.1%, to 51,564.70. Every major index posted weekly gains. Technology stocks powered the advance, with Nvidia climbing 8.7%, Intel jumping 10.1%, and Apple gaining 3%. The energy sector lagged as Exxon Mobil fell 2.2% and Chevron dropped 1.2%, tracking crude prices lower. Airlines rallied, with American Airlines up 2.3% and United rising 3.1%.
The rally erased most of Wednesday's losses, which had been triggered by the Federal Reserve signaling it may raise interest rates later this year to combat inflation. The shift in tone came as the 10-year Treasury yield fell 10 basis points to 4.44%, while the 2-year yield declined to 4.81%. US crude oil settled at $57.58 a barrel, down 0.4%, extending a decline that began after the US and Iran reached a tentative deal to end their war.
The market's advance was broad-based, with all 11 S&P 500 sectors except energy closing higher. The Russell 2000 index of small-cap stocks rose 1.96%, signaling that the rally extended beyond mega-cap names. The move coincided with a sharp decline in bond yields, with the 10-year Treasury yield falling to 4.44% from 4.54% a day earlier, as traders reduced bets on aggressive Fed tightening.
The technology-heavy Nasdaq benefited from a surge in semiconductor stocks, with the Philadelphia Semiconductor Index rising more than 5%. Intel gained 10.1% after announcing a major technology partnership, while Nvidia rose 8.7% and Microsoft added 3%. SpaceX, which completed the largest initial public offering in market history on June 12, continued to draw investor attention to the broader space sector.
Oil prices remained under pressure, with both WTI and Brent crude trading below $60 a barrel for the first time since before the US-Iran conflict escalated. Brent crude fell 0.2% to $57.97 a barrel. The tentative deal between Washington and Tehran has raised expectations that global crude supplies could increase, easing one of the primary inflationary pressures that had weighed on equity markets. The decline in energy costs also supported consumer discretionary stocks, with Carnival rising 3.7% and other travel-related names posting gains.
This article is for informational purposes only and does not constitute investment advice.
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