Stocks surged higher on Friday—attempting to recoup some of their losses from this week—as investors assessed the latest batch of corporate earnings from major banks and markets got a boost from stronger-than-expected retail sales.
Markets rebounded: The Dow Jones Industrial Average jumped 1.9%, around 600 points, while the S&P 500 gained 1.6% and the tech-heavy Nasdaq Composite 1.2%.
Investor sentiment got a boost from Commerce Department data showing that retail sales jumped 1% in June, as consumers spent more on a wide range of goods—everything from food to gas—despite inflation recently hitting a new four-decade high.
Major banks continued to report second-quarter earnings: Shares of Wells Fargo fell roughly 1% after the bank set aside money for bad loans and said profits declined by nearly half since a year ago.
Shares of Citigroup, meanwhile, rose 3% after the bank reported strong revenue and profits that exceeded analyst expectations, in large part thanks to rising interest rates and solid trading revenues.
The results follow “underwhelming” earnings results from the likes of Morgan Stanley and JPMorgan Chase a day earlier, with both firms seeing large declines in profits amid a “volatile market environment.”
Despite Friday’s gains, markets continue to be roiled by recession fears, with the latest red-hot inflation data (consumer prices rose 9.1% in June compared to a year ago) increasing the likelihood of bigger rate hikes from the Federal Reserve.