The stock market rebounded strongly on Friday, posting its first positive week this month as recession fears subsided somewhat thanks to positive economic data suggesting that inflation may have peaked, while some experts expressed optimism about the health of the economy.
Stocks snapped a three-week losing streak on Friday: The Dow Jones Industrial Average rose 2.7%, over 800 points, while the S&P 500 jumped 3.1% and the tech-heavy Nasdaq Composite 3.3%.
Markets got a boost after the latest consumer sentiment survey from the University of Michigan showed that inflation expectations eased slightly in June, rising 5.3% compared to a year ago—but lower than the 5.4% expected.
Investors also cheered optimistic remarks about the economy from St. Louis Federal Reserve President James Bullard, who said that recession fears are “overblown” and consumer spending remains strong.
Stocks were higher across the board on Friday—with all 11 S&P 500 sectors in the green, led by financials, which got a boost after the Federal Reserve’s latest “stress test” found that the largest US banks remain well-capitalized in the event of a recession.
Cruise stocks were among the biggest gainers: Carnival jumped more than 10% after the company said booking volumes had nearly doubled since last quarter, while shares of Norwegian Cruise Line and Royal Caribbean Cruises both rose by around 15%.
“Our forecast expects the Fed to be largely successful in engineering a soft landing, at least through the end of next year,” JPMorgan strategist Marko Kolanovic said in a recent note, predicting that the S&P 500 will rebound significantly by the end of 2022.