S&P 500 Rises but Remains Flat for the Week Following Monday’s Sharp Selloff – By Reuters

By Caroline Valetkevitch

NEW YORK (Reuters) – The stock market ended Friday on a positive note, recovering nearly all its losses from earlier in the week, which had been driven by recession fears and the unraveling of a global yen-funded carry trade.

The technology sector was the primary force behind the index’s gains on Friday, and the Cboe Volatility Index, often referred to as Wall Street’s "fear gauge," decreased following a sharp rise earlier in the week.

The significant drop on Monday followed a notable sell-off the previous week, triggered by a weaker-than-expected jobs report for July that heightened recession concerns. This led investors to unwind their currency carry trade positions involving the Japanese yen.

"Investors are trying to find evidence of a bottom," remarked Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.

On Thursday, Federal Reserve officials indicated they were optimistic that inflation was moderating sufficiently to allow for future interest rate cuts. They stated they would base the magnitude and timing of those cuts on forthcoming economic data.

The Dow rose by 51.05 points, or 0.13%, closing at 39,497.54. The S&P 500 gained 24.85 points, or 0.47%, ending at 5,344.16, while the Nasdaq increased by 85.28 points, or 0.51%, to finish at 16,745.30.

For the week, the S&P 500 slipped by 0.05%, the Dow dropped 0.6%, and the Nasdaq declined by 0.2%.

"There will continue to be a significant amount of uncertainty and anxiety hanging over the market for the next month until the upcoming Fed meeting," commented Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The Fed is anticipated to cut rates at its next meeting scheduled for September 17-18, with traders debating whether a reduction of 25 or 50 basis points is more likely. Current trading shows a 51% probability of a 50-point cut and a 49% chance for a 25-point reduction.

Investors are also looking ahead to next week’s reports on U.S. consumer prices and July retail sales, which could provide further insights into the prospects for the U.S. economy.

Despite recent sell-offs, all three major indexes remain substantially higher for the year, spurred by strong early-year earnings from tech giants and optimism surrounding artificial intelligence.

The S&P 500 and Nasdaq are each up approximately 12% since the end of December, with the recent downturn making tech stocks more attractive in terms of price-to-earnings ratios.

Among notable gainers on Friday, video game publisher Take-Two Interactive Software saw a 4.4% increase as it projected growth in net bookings for the fiscal years 2026 and 2027.

Additionally, Expedia advanced by 10.2% following its surpassing of analysts’ earnings expectations for the second quarter.

Trading volume on U.S. exchanges reached 11.13 billion shares, below the 12.59 billion average for the preceding 20 sessions.

Advancing stocks outnumbered decliners on the NYSE by a ratio of 1.39-to-1, while the Nasdaq showed a 1.14-to-1 ratio favoring decliners.

The S&P 500 recorded 15 new 52-week highs and three new lows, whereas the Nasdaq Composite saw 52 new highs and 159 new lows.