*All three major stock indexes rose by more than 1%* The U.S. core PCE index increased by 2.6% year-over-year in June* The Russell 2000 index recorded a three-week winning streak on a weekly basis.
On July 26th (Friday), local time, the three major U.S. stock indexes opened high and went higher, all closing up by more than 1%.
The U.S. PCE price index for June was basically in line with expectations, consolidating the Fed's interest rate cut expectations and providing certain support for technology stocks.
As of the close, the Dow Jones Industrial Average rose by 654.27 points, or 1.64%, to 40,589.34 points; the Nasdaq Composite Index rose by 176.16 points, or 1.03%, to 17,357.88 points; the S&P 500 index rose by 59.88 points, or 1.11%, to 5,459.10 points.
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Among large-cap technology stocks, Meta rose by more than 2%, Microsoft and Amazon rose by more than 1%, while Apple, Nvidia, and Intel rose slightly; Tesla, Google, and Netflix fell slightly.
For the week, the Nasdaq fell by 2.08%, and the S&P 500 fell by 0.85%, with both the Nasdaq and S&P 500 falling for two consecutive weeks.
The Dow rose by 0.75%, recording four consecutive weekly gains; the Russell 2000 index, which tracks small-cap stocks, rose for the third week in a row, marking the best three-week performance since August 2022.
The earnings season will enter its peak next week, with giants such as Microsoft, Meta, Apple, Amazon, Qualcomm, and Intel announcing their results one after another, coupled with the Fed's interest rate decision at the end of the month, and high volatility in the U.S. stock market is expected to continue.
Greg Boutle, Head of U.S. Equity and Derivatives Strategy at BNP Paribas, said: "What we see from Apple, Microsoft, Amazon, and Meta next week will truly determine whether this rotation of funds continues and the direction of the market."
In terms of economic data, according to data released by the U.S. Department of Commerce on July 26, the U.S.
Personal Consumption Expenditures Price Index (PCE) rose by 2.5% year-over-year in June, lower than the previous value of 2.6%, in line with market expectations; the month-on-month increase was 0.1%, higher than the previous value of 0.0%, also in line with expectations.
The Fed's most concerned inflation indicator - the core PCE index, which excludes food and energy costs, increased by 2.6% year-over-year in June, higher than the market's expected 2.5%; the month-on-month increase was 0.2%, higher than the market's expected 0.1% and the 0.1% in May.
The savings propensity of U.S. consumers has declined, with the savings rate falling from 3.5% in May to 3.4% in June, the lowest level since December 2022.
The continuous downward trend of inflation has further consolidated the market's expectations for the Fed's interest rate cut.
Some analysts believe that inflation is expected to continue to decline towards the Fed's 2% inflation target in the next few months, without the unexpected rebound seen at the beginning of this year.
If the labor market also sends a signal of slowing down, this will provide a more sufficient basis for the Fed to cut interest rates in September.
"Although the core PCE year-over-year data was slightly higher than expected, there was no sign in the report that inflation accelerated unexpectedly," said Etoro's U.S. investment analyst Bret Kenwell.
"Combined with the lower-than-expected CPI report earlier this month and the recent trend of declining inflation data, this should give the Fed the green light to cut interest rates later this quarter."
Bill Adams, Chief Economist at Comerica Bank, said: "The decline in the savings rate indicates that the financial situation of low-income and middle-income families is tight.
Americans with a recent round of high inflation and a narrow financial buffer are feeling the pressure of living standards."
The CME FedWatch Tool shows that the market currently expects a 25 basis point interest rate cut by the Fed before September with a probability of 87.7%, and a 50 basis point cut with a probability of 11.9%.
In terms of individual stock movements on Friday, 3M's second-quarter results exceeded expectations, and the company raised its full-year profit guidance, with the stock closing up 22.99%, the largest one-day increase since 1980.
The report shows that 3M's net sales in the second quarter were $6.26 billion, with expectations of $5.84 billion.
Earnings per share from continuing operations in the second quarter were $1.90.
3M now expects full-year adjusted earnings per share from continuing operations to be between $7 and $7.3, previously expected to be between $6.8 and $7.3.
Bristol-Myers Squibb's second-quarter revenue exceeded expectations and raised its full-year profit guidance, with the stock closing up 11%, the largest one-day increase in nearly 24 years.
Bristol-Myers Squibb's second-quarter revenue was $12.2 billion, with an estimated $11.52 billion.
Adjusted earnings per share in the second quarter were $2.07.
The adjusted gross margin in the second quarter was 75.6%, with an estimate of 73.8%.
Bristol-Myers Squibb expects full-year adjusted earnings per share to be between $0.60 and $0.90, previously expected to be between $0.40 and $0.70.
In the commodity market, international oil prices fell on the 26th.
As of the close of the day, the September delivery of light crude oil futures at the New York Mercantile Exchange fell by $1.12, closing at $77.16 per barrel, a decrease of 1.43%; the September delivery of Brent crude oil futures in London fell by $1.24, closing at $81.13 per barrel, a decrease of 1.51%.
International gold prices rose, with the main contract of COMEX gold futures rising by $27.5 per ounce, an increase of 1.17%, to $2381.0 per ounce.