STORY: Wall Street’s main stock indexes closed higher on Friday as investors again piled into big technology stocks that sparked a broad sell-off earlier this week.
The Dow Jones Industrial Average rose more than 1.6%, while the S&P 500 and Nasdaq both closed up just over 1%.
Five of the so-called “Magnificent Seven” stocks rose on Friday, including Meta Platforms, up more than 2.5%.
The two exceptions are Tesla and Alphabet, whose poor performance sparked a major stock market sell-off on Wednesday.
Further earnings reports from the Magnificent Seven are due next week, and the market’s immediate outlook may depend on how these companies perform.
Anna Rathbun is chief investment officer at CBIZ Investment Advisory Services.
“I think what’s behind this is an expectation from investors: ‘Okay, we’ve been hyping this stuff for over a year now. We want to start seeing quantitative metrics on the ROI of the billions of dollars that we’re putting into AI, and Alphabet hasn’t delivered on that, right?'” [FLASH] “Next week we will see other stocks and companies investing in AI. If investors have the same expectations, they may be in for a similar disappointment if quantitative metrics are not released.”
Among other stock movers, Deckers Outdoor rose more than 6% after raising its full-year profit forecast.
Norfolk Southern Railroad Co. saw its shares soar nearly 11%, its biggest one-day gain since March 2020, after the company reported second-quarter profit beat Wall Street expectations on strong pricing.
And medical device maker Dexcom saw its shares fall more than 40% after it cut its full-year earnings outlook.
Data on Friday showed a modest rise in U.S. prices, highlighting slowing inflation.
Investors will be watching the Federal Reserve for signs of a rate cut in September when it holds its latest two-day policy meeting next week.
