Stocks rallied higher on Friday as Federal Reserve Chair Jerome Powell signaled that interest rate cuts are coming in the near-term. The Dow Jones Industrial Average climbed over 460 points, while the S&P 500 Index and Nasdaq Composite rose about 1.2% and 1.5%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Moving Markets:
Federal Reserve Chair Jerome Powell said in remarks during the central bank's annual summit in Jackson Hole, Wyoming Friday that interest rate cuts are imminent, but did not provide exact timing or the extent of those cuts.
"The time has come for policy to adjust," Powell said in his keynote address. "The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."
"Inflation has declined significantly. The labor market is no longer overheated, and conditions are now less tight than those that prevailed before the pandemic," Powell added. "Supply constraints have normalized. And the balance of the risks to our two mandates have changed."
Regional bank stocks rose on Friday in response to hopes that interest rate cuts are coming in September, with the SPDR S&P Regional Banking ETF
UBS said in a note Friday that the bank now expects interest rate cuts at each of the central bank's Federal Open Market Committee meetings in September, November and December this year.
"The outlook for Fed rate cuts has shifted, with a more mixed set of labor data showing the Fed now has both the imperative and the leeway to cut interest rates," the bank wrote.
In Economic News:
New Home Sales came in well above expectations in July, the Census Bureau reported Friday, rising to their highest level in more than a year as a drop in mortgage rates boosted demand. Sales of newly constructed homes rose 10.6% to a seasonally adjusted annual rate of 739,000 units last month, coming in above June's revised level of 668,000.
On the Earnings Front:
Cava
"We launched our new grilled steak main, once again exhibiting our excellence in culinary innovation," CEO Brett Schulman said in a statement. "Grilled steak is significantly outperforming our expectations and giving guests another reason to visit CAVA and came back more often."
For its fiscal 2024, Cava now expects same-store sales growth of 8.5% to 9.5%, compared to its prior range of 4.5% to 6.5%. The company also plan to open between 54 to 57 new locations this year and expects to report adjusted earnings before interest, taxes, depreciation and amortization of $109 million to $114 million, from its previous range of $100 million to $015 million.
Looking Ahead:
Next week hosts another batch of economic data that could impact Wall Street, including July's personal consumption expenditures index reading for July on Friday. Quarterly earnings reports also include Temu's PDD Holdings
