The stock market continued its upward momentum on Friday, driven by strong economic growth and gains in the technology sector. The Dow Jones Industrial Average achieved a significant milestone, closing at a record high, while the S&P 500 also posted gains. Despite a slight dip in the Nasdaq Composite, the overall market sentiment remained positive. Leading the Dow’s gains were Walmart and Caterpillar, with Chubb and Valero Energy emerging as the top performers in the S&P 500. This week’s ascent has lifted the major indices into positive territory for the second quarter, highlighting investor optimism fueled by economic stability and technological advancements.

Key Takeaways:

  • Dow Jones Closes at Record High: The Dow Jones Industrial Average closed at 40,003.59, rising 134.21 points or 0.34%. This historic close follows the index’s first crossing of the 40,000 threshold on Thursday, where it reached an intraday high of 40,051.05 before pulling back.
  • S&P 500 and Nasdaq Composite Show Mixed Results: The S&P 500 closed up 0.12% at 5,303.27, while the Nasdaq Composite fell 0.07% to 16,685.97. Despite the slight dip, the Nasdaq has shown strong performance overall.
  • Weekly Gains for Major Indices: The Dow Jones rose 1.2% for the week, marking its fifth consecutive weekly gain. The S&P 500 and Nasdaq Composite also finished the week strong, climbing 1.5% and 2.1% respectively, achieving their longest winning streak since February.
  • European Markets Close Lower After Winning Streak: The pan-European Stoxx 600 index ended slightly lower, down 0.13%, following a nine-day winning streak. France’s CAC 40 dropped 0.26%, while the UK’s FTSE 100 and Germany’s DAX both fell by 0.2%. Utilities stocks declined by 0.9%, whereas basic resources gained 1.4%.
  • Asian Markets Mixed with China Leading Gains: China’s CSI 300 index rose 1% to 3,677.97, reaching an eight-month high, supported by measures to boost the property market. Japan’s Nikkei 225 slid 0.34% to 38,787.38, and South Korea’s Kospi fell 1.03% to 2,724.62. Meanwhile, Malaysia’s GDP growth topped estimates at 4.2% in the first quarter of 2024.
  • Oil Prices Record Weekly Gains: Brent crude oil increased by 0.85% to $83.98 a barrel, and US West Texas Intermediate crude rose by 1.05% to $80.06 a barrel. Brent recorded a weekly gain of 1.44%, while WTI added 2.3%, supported by positive economic indicators from China and the U.S.
  • Treasury Yields Rise as Investors Weigh Economic Data: US Treasury yields rose, with the 10-year Treasury yield up more than 4 basis points to 4.42%, and the 2-year Treasury yield at 4.829%, reflecting investor reactions to recent economic data and inflation trends.

FX Today:

  • Gold Prices Rally and Hit Monthly Highs: Spot gold rose 1.3% to $2,407.65 per ounce, marking its highest level since April 19, while US gold futures increased by 1.2% to $2,412.10. The rally was driven by China’s stimulus measures and renewed hopes for US interest rate cuts. Gold’s next target is the all-time high of $2,431, with further resistance expected at $2,450 and the psychological $2,500 level. If XAU/USD retreats below $2,400, potential support levels include the recent lows of $2,332 and $2,303, followed by the 50-day Simple Moving Average (SMA) at $2,284.
  • EUR/USD Slightly Up Amid Mixed Data: The EUR/USD pair rose 0.06% to 1.0872 on Friday. The pair’s movement was influenced by US CPI data indicating a decline in inflation. Channel support is expected around the 1.0795 level, just beneath the 200-day SMA. Resistance lies at the 1.0900 mark, with the pair nearing overbought territory, reducing the likelihood of a substantial advance next week.
  • GBP/USD Gains Ahead of Inflation Data: The GBP/USD pair increased by 0.31% to 1.2705. The pair has moved above its 200-day moving average, entering a trading band between 1.2592 and 1.2708. Psychological support is seen at 1.2600, with solid retracement support at 1.24871 and additional support in the mid-1.25 region from earlier this month.
  • USD/JPY Extends Gains but Remains Below 156.00: The USD/JPY pair rose 0.18% to 155.66, maintaining its upward trajectory. The pair hit a daily low of 155.25 before recovering. Key resistance is at 156.05, with further targets at 157.00 and the April 26 high of 158.44. On the downside, support is seen at 155.18, followed by the 153.60 level from May 16.
  • USD/CAD Steady Amid Low Volatility: The USD/CAD pair remained relatively unchanged, trading within familiar technical levels around 1.3640. The pair is pinned near the 200-hour Exponential Moving Average (EMA) at 1.364, indicating a consolidation phase. Traders are watching for potential breakouts, with resistance at 1.3640 and support around the 1.3550 level.
  • NZD/USD Closes Strongest Week of 2024: The NZD/USD pair rose to 0.6137, marking its best week since late 2023. The pair closed above its main Simple Moving Averages (SMAs) of 20, 100, and 200 days, signalling strong bullish momentum. Despite approaching overbought conditions, the pair maintains its position above key SMAs, with potential resistance at 0.6200 and support at 0.6070.

Market Movers:

  • Chubb Gains on Berkshire Hathaway Investment: Chubb (CB) shares rose over 3%, adding to Thursday’s 4% gain, after Berkshire Hathaway revealed a $6.7 billion stake in the company. This significant investment underscored the market’s confidence in Chubb’s long-term prospects.
  • Freeport McMoRan Surges on Silver Rally: Freeport McMoRan (FCX) closed up more than 4%, leading mining stocks higher as silver prices soared to an 11-year high. The rally in silver provided a significant boost to Freeport McMoRan’s stock, highlighting the company’s strong position in the mining sector.
  • DuPont de Nemours Upgraded by Jefferies: DuPont de Nemours (DD) closed up more than 3% following an upgrade by Jefferies to a buy rating, with a price target set at $101. The upgrade reflects positive sentiment around the company’s growth potential and market positioning.
  • Doximity Soars on Strong Earnings and Forecast: Doximity (DOCS) surged over 18% after reporting Q4 revenue of $118.1 million, beating the consensus estimate of $116.5 million. The company also provided an optimistic Q1 revenue forecast of $119.5 million to $120.5 million, above the consensus of $118.7 million, driving strong investor interest.
  • Reddit Rises on Partnership with OpenAI: Reddit (RDDT) climbed over 10% after announcing a partnership with OpenAI to integrate its content into the ChatGPT chatbot. Analysts believe this collaboration will significantly boost Reddit’s data licensing business, driving future growth.
  • Take-Two Interactive Sees Modest Gains on Positive Earnings: Take-Two Interactive Software (TTWO) closed up more than 1% after reporting Q4 net bookings of $1.35 billion, surpassing the consensus of $1.31 billion. The strong performance reflects the company’s robust market position and growth trajectory.
  • Advanced Micro Devices Added to Wolfe Research’s Alpha List: Advanced Micro Devices (AMD) rose over 1% after Wolfe Research added the stock to its Alpha List, replacing Nvidia. This signals strong confidence in AMD’s competitive edge and future performance in the semiconductor industry.
  • Lam Research Declines on Higher Treasury Yields: Lam Research (LRCX) fell more than 3% as higher Treasury yields weighed on chip stocks. The increase in yields led to concerns over the cost of capital and potential impact on future growth for the semiconductor industry.
  • DXC Technology Plummets on Weak Revenue Forecast: DXC Technology (DXC) dropped over 16% after forecasting 2025 revenue of $12.67 billion to $12.95 billion, below the consensus estimate of $13.18 billion. The disappointing forecast raised concerns about the company’s growth outlook.
  • Cracker Barrel Slumps on Dividend Cut: Cracker Barrel (CBRL) closed down more than 14% after reducing its quarterly dividend to $0.25 per share, well below the consensus expectation of $1.30. The significant cut raised investor concerns about the company’s financial health and future dividend policy.

As the stock market continues to rally, investor confidence remains high due to robust economic fundamentals and advancements in the technology sector. Despite mixed performances in European and Asian markets and ongoing concerns over inflation and interest rates, the strong showing of the S&P 500 and Dow Jones underscores the resilience and growth potential within the tech sector. Investors are navigating a landscape marked by significant milestones, sector shifts, and strategic fiscal moves, all while keeping a close watch on the evolving economic indicators and policy decisions that shape the market’s future trajectory.