U.S. Stocks Move Modestly Higher, Extending Upward Trend

Stocks have moved modestly higher in morning trading on Friday, extending the strong upward move seen over the past several sessions.

The major averages have given back ground after an initial advance but are currently all in positive territory. The Dow is up 70.49 points or 0.2 percent at 34,478.55, the Nasdaq is up 11.27 points or 0.1 percent at 13,794.09 and the S&P 500 is up 9.32 points or 0.2 percent at 4,435.16.

The modest strength on Wall Street comes as stocks continue benefit from recent upward momentum, which has contributed to a six-session winning streak for the S&P 500.

The S&P 500 and the Nasdaq once again reached their best closing levels in over a year on Thursday, while the Dow set a new six-month closing high.

Buying interest remains somewhat subdued, however, as some traders take a breather to assess the near-term outlook for the markets.

Following yesterday’s avalanche of data, the U.S. economic calendar is relatively quiet today, although the University of Michigan released a report showing a bigger than expected improvement in U.S. consumer sentiment in the month of June.

The University of Michigan said is consumer sentiment index climbed to 63.9 in June from 59.2 in May. Economists had expected in the index to inch up to 60.0.

The report also showed a significant decrease in year-ahead inflation expectations, which tumbled to 3.3 percent in June from 4.2 percent in May, hitting the lowest level since March 2021.

Five-year inflation expectations edged down to 3.0 percent in June from 3.1 percent in May, again staying within the narrow 2.9-3.1 percent range for 22 of the last 23 months.

The decrease inflation expectations may add to recent investor optimism that the Federal Reserve won’t follow through on its plan to continue raising rates.

CME Group’s FedWatch Tool is currently pointing to just one quarter point rate hike compared to the two forecast by the Fed.

Sector News

Most of the major sectors are showing only modest moves on the day, contributing to the relatively lackluster performance by the broader markets.

Interest rate-sensitive utilities stocks are seeing notable strength, however, with the Dow Jones Utility Average climbing by 1.0 percent to its best intraday level in a month.

Housing and airline stocks are also seeing some strength on the day, while tobacco and steel stocks have moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Friday. Japan’s Nikkei 225 Index advanced by 0.7 percent, while Hong Kong’s Hang Seng Index jumped by 1.1 percent.

The major European markets have also moved to the upside on the day. While the French CAC 40 Index has surged by 1.2 percent, the German DAX Index is up by 0.5 percent and the U.K.’s FTSE 100 Index is up by 0.3 percent.

In the bond market, treasuries are giving back ground after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 5.9 basis points at 3.787 percent.

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