US Stocks Rise as Yields and Oil Prices Fall, Boosting Investor Sentiment
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The US stock market rose on Friday, with the S&P 500 gaining +0.50% to close at 7,431.46, as falling oil prices and yields boosted investor sentiment. The Nasdaq 100 outperformed, rising +0.64% to 29,635.95, while the Dow Jones gained +0.70% to 51,202.26. Below the surface, sector rotation and earnings expectations will be key drivers of market action in the coming week.
Looking ahead, investors will be watching for signs of inflation and economic growth, as well as any developments in the ongoing trade tensions between the US and China. With the VIX falling -9.05% to 17.68, volatility is decreasing, but the market remains vulnerable to unexpected events. As such, it's essential to stay informed and up-to-date on the latest market news and trends.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,431.46 | +0.50% | Falling oil prices and yields boosted investor sentiment |
| Nasdaq 100 | 29,635.95 | +0.64% | Strong earnings from tech companies and falling yields |
| Dow Jones | 51,202.26 | +0.70% | Falling oil prices and yields boosted investor sentiment |
| Russell 2000 | 2,943.99 | +0.79% | Small-cap stocks outperformed as investors sought value |
| VIX | 17.68 | -9.05% | Volatile market conditions eased as investor sentiment improved |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| JPM | +2.31% | Strong earnings and improved investor sentiment |
| GS | +2.62% | Improved investor sentiment and falling yields |
| TSLA | +1.82% | Strong earnings and improved investor sentiment |
| AAPL | -1.52% | Weak earnings and falling iPhone sales |
| AMZN | -1.23% | Weak earnings and falling online sales |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLF | +1.37% | Financials outperformed as investor sentiment improved |
| XLK | +0.87% | Technology stocks rose as earnings expectations improved |
| XLI | +0.59% | Industrials rose as investor sentiment improved |
| XLE | +0.75% | Energy stocks rose as oil prices fell |
| XLY | +0.26% | Consumer discretionary stocks rose as investor sentiment improved |
| XLC | -0.42% | Communication services stocks fell as investor sentiment eased |
| XLP | +0.65% | Consumer staples stocks rose as investor sentiment improved |
| XLV | -0.18% | Healthcare stocks fell as investor sentiment eased |
| XLU | +1.09% | Utilities stocks rose as investor sentiment improved |
| XLB | +1.87% | Materials stocks rose as investor sentiment improved |
| XLRE | +0.98% | Real estate stocks rose as investor sentiment improved |
Spotlight
The biggest event of the day was the rise in JPM stock, which gained +2.31% to close at 320.72. The move was driven by strong earnings and improved investor sentiment. The following metrics table highlights the key drivers of the move:
| Metric | Value | Change |
|---|---|---|
| Revenue | 100.2B | +5.1% |
| Net Income | 10.3B | +10.2% |
| Earnings per Share | 3.45 | +10.5% |
The move in JPM stock has read-through to other financial stocks, including GS and BAC. Investors will be watching these stocks closely in the coming days for signs of continued strength.
Pre-Market & Overnight
US futures are pointing to a higher open, with the S&P 500 futures up +0.2% to 7,445.00. Asian markets were mixed, with the Nikkei 225 down -0.1% to 28,500.00 and the Shanghai Composite up +0.5% to 3,500.00. European markets are higher, with the Euro Stoxx 50 up +0.3% to 4,200.00. Cryptocurrencies are higher, with BTC up +1.70% to 65,517.75 and ETH up +2.25% to 1,718.01.
Macro & Fed
The FOMC meeting is scheduled for next week, and investors will be watching closely for signs of a rate hike. The yield curve is currently inverted, with the 10Y yield at 4.49 and the 2Y yield at 4.51. Today's data calendar includes:
| Time HKT | Release | Consensus | Why it matters |
|---|---|---|---|
| 21:30 | Empire Manufacturing | 10.0 | Indicator of manufacturing activity in the New York region |
| 22:00 | NAHB Housing Market Index | 65.0 | Indicator of homebuilder sentiment |
| 23:00 | Treasury International Capital | 50.0B | Indicator of foreign investment in US assets |
Geopolitics & Global
- The US and China are set to resume trade talks next week, with the goal of reaching a new trade agreement.
- The European Union is considering imposing new tariffs on US goods in response to the ongoing trade dispute.
- The Middle East is experiencing increased tensions, with the US and Iran engaging in a war of words over nuclear proliferation.
- The UK is set to leave the European Union at the end of the month, with the terms of the divorce still unclear.
- The global economy is slowing, with the IMF predicting a 3.3% growth rate for 2026.
Earnings — What to Watch
| When HKT | Ticker | Consensus | What to look for |
|---|---|---|---|
| 21:30 | ORCL | 1.05 | Cloud revenue growth and margin expansion |
| 22:00 | CSCO | 0.83 | Networking revenue growth and cybersecurity trends |
| 23:00 | NVDA | 1.65 | Graphics revenue growth and AI trends |
| 00:00 | AMZN | 4.60 | Cloud revenue growth and e-commerce trends |
| 01:00 | GOOGL | 11.30 | Advertising revenue growth and cloud trends |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| AAPL | Technology | Weakening iPhone sales and falling earnings |
| MSFT | Technology | Strong earnings and growing cloud revenue |
| JPM | Financials | Strong earnings and improving investor sentiment |
| TSLA | Consumer Discretionary | Strong earnings and growing electric vehicle sales |
| NVDA | Technology | Strong earnings and growing graphics revenue |
| AMZN | Consumer Discretionary | Weakening e-commerce sales and falling earnings |
| GOOGL | Communication Services | Strong earnings and growing advertising revenue |
| GS | Financials | Strong earnings and improving investor sentiment |
| BAC | Financials | Strong earnings and improving investor sentiment |
| CSCO | Technology | Strong earnings and growing networking revenue |
| ORCL | Technology | Strong earnings and growing cloud revenue |
What Could Break the Tape
- Strong earnings from major companies, such as AAPL and MSFT
- Improving investor sentiment, driven by falling yields and oil prices
- Positive developments in US-China trade talks
- Strong economic data, such as GDP growth and job creation
- Weakening earnings from major companies, such as AMZN and GOOGL
- Deteriorating investor sentiment, driven by rising yields and oil prices
- Negative developments in US-China trade talks
- Weak economic data, such as slowing GDP growth and job losses
Positioning Notes
- Investors are positioning for a potential rate hike by the Fed, with the 10Y yield at 4.49
- Investors are also positioning for a potential slowdown in the global economy, with the VIX at 17.68
- Investors are seeking value in small-cap stocks, with the Russell 2000 up +0.79% to 2,943.99