US stocks jump as small cap surge continues
The S&P 500 snapped its longest losing streak since April with its largest gain in over a month, ending up 1.1%. The Nasdaq 100 gained 1%, while the Russell 2000 led the way again with a 1.7% advance.
Small caps have outperformed for six consecutive sessions, tying their longest such run since September 2022.
The S&P 500, however, still ended up posting back-to-back weekly losses for the first time since April, and a jam-packed week of market-moving events looms.
Brian Garrett, managing director at Goldman Sachs, said in a note to analysts that “next week is arguably the busiest week of the summer,” and flagged that the options-implied move for the S&P 500 was +/-2%. That’s the biggest anticipated weekly move for the benchmark index this year.
Not only is there a Federal Reserve meeting and the monthly US non-farms payroll report, but 40% of the S&P 500 (by market cap) reports, including Microsoft, Meta, Apple, and Amazon.
Friday’s gains were broad-based, with seven stocks in the S&P 500 up for every one that was down. Eight S&P sector ETFs gained more than 1% and all were positive, led by the 1.9% rise in communication services.
A number of standout earnings reports buoyed US stocks to close out the week.
3M had its best day in more than four decades, gaining 23% on strong quarterly results that inspired hopes that the new CEO’s turnaround plan would bear fruit.
Mohawk Industries also exceeded expectations on earnings and boosted its guidance for the current quarter, sparking a 19.5% advance.
Charter Communications enjoyed its best day on record, up 16.6% with analysts pleasantly surprised by its strong free cash flow and lower-than-expected subscriber losses.
Shares of Bristol Myers also rose double digits — its best day since 2000 — after hiking its full-year profit forecast and having all of its largest drugs post better-than-expected sales.
On the other side of the spectrum, Dexcom cratered, down 40.7% for its worst day ever. The company slashed its sales forecast, with analysts expecting more pressure on operating performance as GLP-1 weight loss drugs dent demand for its glucose monitoring products.
