The U.S. stock market experienced a significant recovery on Friday, with technology stocks rebounding from earlier losses and bitcoin stabilizing after a prolonged decline. The S&P 500 surged by 2%, marking its best performance since May. The Dow Jones Industrial Average soared by 1,206 points, or 2.5%, surpassing the 50,000 mark for the first time, while the Nasdaq composite increased by 2.2%.
A key driver of this rally was the solid performance of chip companies, particularly Nvidia and Broadcom. Nvidia experienced a 7.8% jump, while Broadcom increased by 7.1%, reversing earlier losses. Both companies benefit from the surging demand for artificial intelligence technology, as evidenced by Amazon’s announcement that it anticipates a massive $200 billion in investments this year across multiple sectors, including AI and robotics. However, despite these optimistic projections, Amazon’s stock fell by 5.6%, highlighting concerns about whether such large investments will yield sufficient profits.
Even with Friday’s gains, the S&P 500 concluded the week with its third loss in four weeks. Investors remain apprehensive about the potential implications of AI on traditional software companies, particularly after the AI firm Anthropic released free tools capable of automating various services. This development sent shockwaves through software stocks, contributing to their declines.
Bitcoin showed signs of recovery after weeks of significant losses, rising back above the $70,000 mark after having dipped close to $60,000 on Thursday. This stabilization in cryptocurrency prices provided a boost to companies involved in the crypto economy; notably, Robinhood Markets saw a 14% increase, while Coinbase Global rose by 13%. Additionally, Strategy, a company focused on holding bitcoin, witnessed a remarkable 26.1% surge.
The market’s upswing was also supported by smaller U.S. companies whose profits are more closely tied to domestic consumer spending. A preliminary report from the University of Michigan indicated that U.S. consumer sentiment improved slightly, contrary to economists’ predictions of a decline. This positive sentiment was particularly evident among households that own stocks, buoyed by the S&P 500 reaching a record level the previous month.
Airline stocks strengthened, with optimism that improved consumer confidence would lead to increased travel spending. United Airlines rose by 9.3%, Delta Air Lines by 8%, and American Airlines by 7.6%. Additionally, shares in the Russell 2000 index, representing smaller companies, increased by 3.6%, outperforming the S&P 500.
In total, the S&P 500 climbed by 133.90 points to finish at 6,932.30, while the Dow closed at 50,115.67, up 1,206.95 points. The Nasdaq composite ended at 23,031.21 after gaining 490.63 points.
International markets mirrored the day’s positive sentiment, with many European indexes rising. However, Stellantis, an auto manufacturer, saw its stock plummet by 25% after announcing a significant charge of 22 billion euros ($26 billion) related to reducing electric vehicle production due to a reevaluation of market demand. Conversely, Japan’s Nikkei 225 index posted a 0.8% gain, aided by a 2% rise in shares of Toyota Motor, following the announcement of a leadership change.
In the bond market, Treasury yields remained stable, with the yield on the 10-year Treasury note edging down slightly to 4.20% from 4.21%.
