The S&P 500 ended higher on Friday and was little changed for the week after clawing back from Monday’s steep dive that was prompted by fears of a recession and unwinding of a global yen-funded carry trade. Canada’s main stock index also closed out a turbulent week on a positive note, helped by gains for some of the economically sensitive sectors, such as financials and materials.
The technology sector gave the benchmark U.S. index its biggest boost on Friday, and the Cboe Volatility Index, Wall Street’s “fear gauge,” fell after surging at the start of the week.
Monday’s big decline followed a sharp sell-off last week as a weaker-than-expected U.S. July jobs report sparked recession fears, and investors unwound currency carry trade positions involving the Japanese yen.
“Investors are trying to find evidence of a bottom,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.
On Thursday, Federal Reserve policymakers expressed confidence that inflation was cooling enough to allow rate cuts ahead, and said they will take their cues on the size and timing of those cuts from the economic data.
“There is going to continue to be a significant amount of uncertainty and anxiety hanging over the market for the course of the next month until we get to the next Fed meeting,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
Investors see a 55% chance that the Fed will cut interest rates by 50 basis points at its next policy meeting on Sept. 17-18, with a 25 basis point cut seen as having a 45% probability, according to the CME Group’s FedWatch Tool.
Investors also await next week’s readings on U.S. consumer prices and retail sales for July, which could provide fresh evidence on the chances of a soft landing for the American economy.
The Dow Jones Industrial Average rose 51.05 points, or 0.13%, to 39,497.54, the S&P 500 gained 24.85 points, or 0.47%, to 5,344.16 and the Nasdaq Composite added 85.28 points, or 0.51%, to 16,745.30.
For the week, the S&P 500 was down 0.05%, the Dow was down 0.6% and the Nasdaq was down 0.2%.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 85.69 points, or 0.39%, at 22,311.30.
For the week, it was up 0.38%, with the index rebounding after it fell on Wednesday to a near six-week low.
Data on Friday showed that Canada’s economy shed 2,800 jobs in July but some of the details were encouraging, including increases in full-time jobs and hours worked.
The materials group climbed 1.09% as copper prices moved higher and was helped by a 15.35% jump in the shares of IAMGOLD Corp after the company reported quarterly results.
The price of oil settled up 0.9% at US$76.84 a barrel, helping to support the energy sector, which ended 0.44% higher.
Financials rose 0.75% in Toronto and technology was up 0.94%.
Among the biggest decliners was Algonquin Power & Utilities Corp. Its shares tumbled 12.60% after the company announced it would sell its renewable energy business, excluding hydropower operations. It also announced a dividend cut.
Shares of Canadian National Railway and Canadian Pacific Kansas City also ended lower after the Canadian Teamsters union said a work stoppage could start on Aug. 22 if a deal is not reached.
Among individual stocks in the U.S, videogame publisher Take-Two Interactive Software climbed 4.4% as it expects net bookings to grow in fiscal years 2026 and 2027.
Expedia also advanced 10.2% after the online travel agency beat analysts’ expectations for second-quarter profit.
Volume on U.S. exchanges was 11.13 billion shares, compared with the 12.59 billion average for the full session over the last 20 trading days. Advancing issues outnumbered declining ones on the NYSE by a 1.39-to-1 ratio; on Nasdaq, a 1.14-to-1 ratio favored decliners. The S&P 500 posted 15 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 52 new highs and 159 new lows.
Reuters, Globe staff
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