US close: Stocks gain as Fed doves lift sentiment

(Sharecast News) - Wall Street stocks turned in a winning performance on Friday, but all three major averages still turned in a weekly loss following a dramatic sell-off in AI-linked stocks in the previous session.

At the close, the Dow Jones Industrial Average was up 1.08% to 46,245.41, while the S&P 500 advanced 0.98% to 6,602.99 and the Nasdaq Composite saw out the session 0.88% firmer at 22,273.08.

The Dow closed 493.15 points higher on Friday, more than reversing losses recorded in the previous session after a dramatic turnaround in shares of artificial intelligence darling Nvidia as market participants seemingly gave up hope that the central bank would move to cut rates again in December.

Nvidia's stronger-than-expected third-quarter results and upbeat guidance briefly sent Wall Street higher on Thursday, with the Dow up nearly 718 points at one stage. However, the rally faded as broader weakness set in, leaving Nvidia down 3.2% by the close and on track for a 10.8% drop in November - the stock's worst month since March.

Fresh jobs data also added to the pressure, showing September payrolls growth ahead of forecasts but highlighting continued unevenness in the labour market as the unemployment rate weakened.

Sentiment got a boost on Friday after New York Fed president John Williams said he believes the central bank can lower interest rates further, arguing labour market weakness now posed a greater risk to the economy than inflation. With policymakers divided over the path of policy, Williams aligned with the dovish camp, suggesting rates remained somewhat restrictive for growth.

"I view monetary policy as being modestly restrictive, although somewhat less so than before our recent actions," he said. "Therefore, I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals."

Fed funds futures were pricing in a more than 70% chance of a 25 basis point cut at the central bank's 10 December meeting, a spike from the less than 40% chance priced in on Thursday.

On the macro front, US factory activity slowed to a four-month low in November as tariffs pushed up import costs and weighed on demand, according to S&P Global's latest flash survey. The manufacturing PMI slipped to 51.9 from 52.5 in October, undershooting forecasts for 52, while new orders fell sharply to 51.3 from 54. Inventories climbed to the highest level in the survey's history, pointing to a build-up of unsold goods that could weigh on output in the months ahead.

The weakness in manufacturing was offset by resilience in services, where the PMI rose to 55 from 54.8 in October, with new orders for services firms also strengthening, climbing to 55 from 53.6. As a result, the composite output index, which tracks both manufacturing and services, edged up to 54.8 from 54.6, signalling continued expansion across the broader economy.

Elsewhere, wholesale inventories were unchanged in August at roughly $908bn, according to the Census Bureau, against an earlier estimate for a 0.2% drop and following a revised 0.1% rise in July. Durable goods inventories edged up 0.1% after falling in the prior month, with higher stocks of metals, computer equipment and autos offsetting declines in furniture, machinery and professional equipment. Nondurable goods inventories slipped 0.1%, reversing July's 0.6% increase. On an annualised basis, wholesale inventories rose 1.1% in August, ahead of the initial estimate of 0.7%.

Finally, US consumer sentiment edged higher in November after the end of the federal shutdown, but remained close to record lows as households continued to struggle with high prices and weaker incomes, according to the University of Michigan. The headline index rose to 51.0 from a preliminary reading of 50.3, still the second-lowest reading on record and only just above the June 2022 trough.

The survey's Current Economic Conditions Index dropped 12.8% to an all-time low of 51.1, reflecting sharp declines in assessments of personal finances and buying conditions for durable goods. In contrast, the Consumer Expectations Index ticked up 1.4% to 51.0, offering a modest improvement in outlook. Inflation expectations showed some easing, with year-ahead forecasts down to 4.5% from 4.6%, marking a third consecutive monthly decline but still well above the 3.3% seen at the start of the year. Longer-term inflation expectations softened more noticeably, falling to 3.4% from 3.9%.

No major corporate earnings were released on Friday.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Dow Chemical Co. (DOW) $22.20 5.97%

Home Depot Inc. (HD) $344.19 3.29%

Merck & Co. Inc. (MRK) $97.76 2.94%

Unitedhealth Group Inc. (UNH) $319.83 2.71%

American Express Co. (AXP) $352.89 2.64%

Coca-Cola Co. (KO) $72.96 2.44%

International Business Machines Corporation (CDI) (IBM) $297.44 2.42%

Nike Inc. (NKE) $62.80 2.23%

3M Co. (MMM) $168.07 2.11%

Procter & Gamble Co. (PG) $150.87 1.84%

Dow Jones - Fallers

Walmart Inc. (WMT) $105.32 -1.67%

Chevron Corp. (CVX) $149.98 -0.22%

JP Morgan Chase & Co. (JPM) $298.02 -0.12%

Walgreens Boots Alliance, Inc. (WBA) $0.00 0.00%

Dowdupont Inc. (DWDP) $0.00 0.00%

Apple Inc. (AAPL) $269.88 0.00%

Intel Corp. (INTC) $33.00 0.00%

Microsoft Corp. (MSFT) $471.83 0.00%

Goldman Sachs Group Inc. (GS) $774.03 0.04%

Boeing Co. (BA) $179.70 0.18%

S&P 500 - Risers

VF Corp. (VFC) $16.21 10.80%

TripAdvisor Inc. (TRIP) $14.51 8.57%

Ross Stores Inc. (ROST) $174.00 8.41%

Gap Inc. (GAP) $24.93 8.24%

DENTSPLY Sirona Inc. (XRAY) $10.58 6.98%

Advance Auto Parts (AAP) $51.97 6.88%

D. R. Horton Inc. (DHI) $147.13 6.84%

Celanese Corp. (CE) $37.93 6.75%

Mohawk Inds Inc. (MHK) $109.86 6.03%

HP Inc (HPQ) $24.00 5.97%

S&P 500 - Fallers

Bath & Body Works, Inc. (BBWI) $14.85 -6.13%

Oracle Corp. (ORCL) $198.76 -5.66%

L3Harris Technologies Inc. (LHX) $277.72 -2.27%

Arista Networks Inc. (ANET) $117.37 -1.81%

RTX Corporation (RTX) $169.55 -1.77%

Walmart Inc. (WMT) $105.32 -1.67%

Lockheed Martin Corp. (LMT) $460.55 -1.60%

Netflix Inc. (NFLX) $104.31 -1.29%

Fluor Corp. (FLR) $40.05 -1.23%

General Electric Co. (GE) $287.40 -1.09%

Nasdaq 100 - Risers

Qvc Group Inc Series A (QVCGA) $9.69 22.97%

Ross Stores Inc. (ROST) $174.00 8.41%

DENTSPLY Sirona Inc. (XRAY) $10.58 6.98%

PACCAR Inc. (PCAR) $102.99 5.52%

Expedia Group Inc. (EXPE) $247.49 5.42%

Idexx Laboratories Inc. (IDXX) $725.91 5.30%

American Airlines Group (AAL) $12.87 5.15%

Cognizant Technology Solutions Corp. (CTSH) $75.97 5.01%

J.B. Hunt Transport Services Inc. (JBHT) $166.36 4.68%

Paypal Holdings Inc (PYPL) $60.57 4.24%

Nasdaq 100 - Fallers

Asml Holdings N.V. (ASML) $966.57 -1.47%

Netflix Inc. (NFLX) $104.31 -1.29%

Tesla Inc (TSLA) $391.09 -1.05%

Nvidia Corp. (NVDA) $178.88 -0.97%

Western Digital Corp. (WDC) $139.19 -0.74%

T-Mobile Us, Inc. (TMUS) $209.48 -0.49%

KLA-Tencor Corp. (KLAC) $1,097.12 -0.48%

Monster Beverage Corp (MNST) $72.04 -0.25%

Electronic Arts Inc. (EA) $200.65 -0.23%

Hologic Inc. (HOLX) $74.19 0.00%