The stock market closed higher on Friday after Federal Reserve Chair Jerome Powell said the economy remains in good shape. The Dow rose 0.5%, the S&P 500 gained 0.6%, and the Nasdaq added 0.7%. However, the S&P 500 and Nasdaq posted their third straight weekly decline.
Powell emphasized the need for greater clarity on government policy impacts before adjusting monetary policy. He noted that the labor market remains solid and inflation is approaching the Fed’s 2% annual goal. The yield on the 10-year Treasury rose to 4.31% in late trading, up from yesterday’s 4.28% close.
This yield, which affects borrowing costs for various loans, indicated less immediate concern about the economy. Broadcom shares jumped 8.6% after reporting strong results, fueled by AI-related demand.
Market gains follow Powell’s reassurance
Other notable gainers included Palantir, AppLovin, Walgreens Boots Alliance, and Gap. However, Hewlett Packard Enterprise shares plunged 12% after warning of pricing pressure and announcing cost-cutting measures. Costco also dropped 6% after reporting earnings below expectations.
The S&P 500 moved below its 200-day moving average on Friday, marking a significant technical breach. Most of the “Magnificent 7” stocks also traded below this threshold, stoking fears of sustained market volatility. This week has been particularly noisy and chaotic for markets, driven by tariff-related announcements.
Despite a rocky session, US stocks managed to erase significant losses on Friday, ending the week with unexpected gains. Bank of America raised its price target for Broadcom, citing the chip designer’s growing list of hyperscaler customers. The company currently has engagements with seven hyperscaler customers, which bolsters analysts’ confidence in Broadcom’s growth potential.
