Wall Street experienced a notable upswing on Friday, with the Dow Jones Industrial Average climbing 519 points, or 1%, as investors sought to recover from a turbulent week marked by fluctuating Treasury yields and oil prices. The Nasdaq Composite and the S&P 500 both increased by 0.7%, buoyed by gains in the tech sector.
The market rally was partly fueled by an announcement that Russian President Vladimir Putin had agreed to supply diesel to the U. S. and global markets. This news led to a slight dip in oil prices, with West Texas Intermediate crude futures trading around $91 per barrel and Brent crude futures at approximately $103.
In the tech sector, SpaceX shares rose following the company's announcement of a deal to purchase a nationwide spectrum portfolio. This development negatively impacted shares of AT&T, Verizon, and T-Mobile, as investors expressed concerns over increased competition. Software stocks also saw gains, with Palo Alto Networks up nearly 5%, and CrowdStrike and Palantir Technologies rising 4% and 3%, respectively. Microsoft and Amazon, members of the "Magnificent Seven, " each advanced 2%.
Healthcare stocks were another bright spot, with companies like Merck and Gilead Sciences each jumping nearly 3%. Vaccine stocks, particularly Moderna, surged on optimism surrounding the National Institutes of Health's cancer vaccine efforts.
Despite the positive close, the tech sector faced challenges earlier in the week. On Thursday, the Nasdaq dropped more than 1%, its largest one-day loss since mid-August, after reports confirmed that OpenAI projected $50 billion in annualized revenue by the end of September. This figure was down from a previously reported $68 billion, which included gross revenue from partners.
Analyst Adam Crisafulli from Vital Knowledge noted that the sell-off was due to extreme positioning imbalances, suggesting that a sharp rebound in AI-linked tech stocks was unlikely. He highlighted concerns about the attractiveness of standalone frontier labs and market resistance to AI-linked debt and equity.
Looking ahead, the upcoming earnings season is expected to provide further market direction. Major banks, along with companies like Johnson & Johnson and UnitedHealth, are set to report next week. Michael Monaghan of Founder ETFs remains optimistic about equities through the year-end, citing anticipated growth from companies. However, he cautioned that the ongoing conflict in the Middle East could impact the market, despite assurances from Trump that the U. S. would not attack Iran before the midterm elections.
In a significant development, it was announced that Russia would supply millions of tons of diesel to the global market. The agreement includes an immediate supply of over 300,000 tons, followed by 500,000 tons in November, and an additional 1 million tons thereafter. Moscow plans to deliver another 3 million tons, contingent on the condition of its refineries.
Meanwhile, Verizon shares plummeted more than 9% on Friday, heading for their worst day since July 2002, following SpaceX's spectrum purchase announcement. If the stock closes at this level, it would mark its steepest decline in over two decades.
Vaccine stocks, including Moderna and Novavax, saw a boost after reports that the NIH plans to accelerate the development of personalized cancer vaccines. The initiative, set to begin in December, will focus on various cancers, utilizing mRNA technology to target tumor-specific proteins.
As the midterm elections approach, public opposition to data center construction and skepticism about AI are emerging as key political issues. Wall Street's heavy investment in AI, with projected expenditures exceeding $5 trillion by 2030, faces scrutiny as the technology's profitability remains uncertain. Political analyst Ed Mills from Raymond James warned that post-election, the market might face increased challenges related to AI development.
Adding to economic concerns, a Federal Reserve survey revealed that U. S. families' ability to manage debt has deteriorated over the past three years, reaching levels not seen since the aftermath of the global financial crisis. The survey highlighted a significant increase in families falling behind on financial obligations.
Additionally, consumer sentiment fell in early October, as inflation expectations worsened, marking the second-lowest sentiment on record.
