(Bloomberg) — A rally in the world’s largest technology companies buoyed the broader stock market, while bond yields extended their slide amid Federal Reserve rate-cut bets.
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Also aiding sentiment on Friday were headlines that US President-elect Donald Trump and Chinese President Xi Jinping spoke by phone, a conversation that could set the tone for relations between the world’s two largest economies. The S&P 500 rose almost 1%, with the benchmark gauge poised for its biggest weekly advance since the US election week. The Nasdaq 100 gained over 1.5%. Intel Corp. jumped 7% after website SemiAccurate said the company may be an acquisition target.
Trump, who is set to be sworn in as the 47th US president on Monday, has reiterated his focus on core priorities such as raising tariffs and cutting taxes. Equities rallied following his November election win on bets that his proposals would boost corporate earnings at a time when the economy remains resilient. While stocks faltered last month on hawkish Fed signals, recent data showing cooling inflation reignited bets on rate cuts.
“This week’s easing inflation data and a positive reaction to earnings from several financial companies resulted in a bond and stock rally,” said Craig Johnson at Piper Sandler. “Recent short-term oversold conditions and weak bullish sentiment are underpinning the recovery of the major indices from within their primary uptrends.”
The S&P 500 rose 0.9%. The Nasdaq 100 climbed 1.7%. The Dow Jones Industrial Average added 0.7%. A Bloomberg gauge of the “Magnificent Seven” megacaps rallied 1.8%. The Russell 2000 advanced 1%.
The yield on 10-year Treasuries declined three basis points to 4.59%. The Bloomberg Dollar Spot Index rose 0.3%. Bitcoin hovered near $102,000.
Trump’s return to the White House will likely shield US stocks from a big selloff, according to Bank of America Corp. strategists, as investors focus on his protectionist agenda and proposals for lower corporate taxes.
US stocks are “protected by Trump” from downside, strategist Michael Hartnett wrote in a note, although he doesn’t expect sharp gains either due to risks including high concentration in mega-cap technology stocks, valuations and investor positioning.
Corporate Highlights:
US auto safety regulators are probing General Motors Co. over concerns that more than 870,000 of its full-size pickup trucks and SUVs face the risk of engine failure.
Applied Materials Inc. and Lam Research Corp. were raised to overweight from sector weight at KeyBanc Capital Markets as the broker repositions semicap coverage toward immediate growth drivers.
The US plans to slash the price it pays for the Novo Nordisk A/S blockbusters Ozempic and Wegovy, the latest drugs to be targeted under legislation that’s expected save the government more than $200 billion over a decade.
J.B. Hunt Transport Services Inc. reported fourth-quarter earnings per share that trailed consensus expectations.
JetBlue Airways Corp. and Southwest Airlines Co. were downgraded to underperform from neutral at Bank of America Corp., which citied their lower exposure to corporate, premium and international routes.
Bumble Inc. founder Whitney Wolfe Herd will return to the dating-app brand as Chief Executive Officer, the company said in a statement Friday.
Toronto-Dominion Bank is moving up the start date for its new chief executive officer, Raymond Chun, by two months and slashed executives’ pay in the wake of its historic and costly money-laundering scandal.
Rio Tinto Group and Glencore Plc have held early stage talks about combining their businesses to create a behemoth to rival longstanding industry titan BHP Group.
Some of the main moves in markets:
Stocks
The S&P 500 rose 0.9% as of 9:31 a.m. New York time
The Nasdaq 100 rose 1.7%
The Dow Jones Industrial Average rose 0.7%
The Stoxx Europe 600 rose 0.8%
The MSCI World Index rose 0.7%
Bloomberg Magnificent 7 Total Return Index rose 1.8%
The Russell 2000 Index rose 1%
Currencies
The Bloomberg Dollar Spot Index rose 0.1%
The euro fell 0.1% to $1.0286
The British pound fell 0.5% to $1.2183
The Japanese yen fell 0.4% to 155.77 per dollar
Cryptocurrencies
Bitcoin rose 2.3% to $102,474.64
Ether rose 2.9% to $3,413.97
Bonds
The yield on 10-year Treasuries declined two basis points to 4.59%
Germany’s 10-year yield declined three basis points to 2.52%
Britain’s 10-year yield declined five basis points to 4.63%
Commodities
West Texas Intermediate crude fell 0.7% to $78.16 a barrel
Spot gold fell 0.4% to $2,704.52 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Sujata Rao, Margaryta Kirakosian and John Viljoen.
