Dow surges 700 points, fueled by latest earnings and inflation data: Live updates

Stocks jumped Friday as Wall Street looked to cap off a turbulent week on a positive note, and investors weighed fresh U.S. inflation data.

The Dow Jones Industrial Average rallied 690 points, or 1.7%, led to the upside by 3M. The industrials giant popped nearly 20% and headed for its best day since at least 1972. The S&P 500 climbed 1.1%, along with the Nasdaq Composite.

Friday’s moves stem from a combination of oversold sentiment, a stronger-than-expected GDP report Thursday and the view that the Federal Reserve will begin cutting rates due to economic resilience, said CFRA Research’s Sam Stovall.

“Today’s benign PCE report helped talk the market off the ledge,” he added. “With this pullback, the great rotation lives on and breadth continues to be on our side.”

Investors continued their pivot into cyclical areas of the market and small caps, with the Russell 2000 last up about 2%. Industrials and materials stocks rose, lifting their respective S&P sectors about 2%.

Some technology names that have struggled amid this week’s sell-off gained, with Nvidia, Microsoft and Amazon last up nearly 2% each. Meta Platforms added 3%. The S&P’s information technology sector surged about 1.8%.

Wall Street also assessed June’s personal consumption expenditures price index, an inflation reading that is preferred by central bank policymakers. On a monthly basis, headline PCE rose 0.1% and by 2.5% from a year ago. That was in line with estimates from economists polled by Dow Jones.

This positive inflation news has also lifted investor hopes for more rate cuts this year, with the Fed funds futures market pricing in cuts in September, November and December.

“The numbers have been coming in tamer,” said Ken Mahoney, president of Mahoney Asset Management. “In housing and real estate, you’re starting to see some cracks. They’re going to stop messing around, start cutting rates.”

That data comes at the end of a volatile week on Wall Street. The S&P 500 is down 0.4% this week, while the Nasdaq has lost 1.7%. The Dow is the outlier, up 1.1%. Those declines come as investors seemed to be part of a broader rotation into small caps and cyclicals.

In other news, medical device maker Dexcom plunged 41% after releasing disappointing fiscal full-year guidance. Footwear company Deckers reported fiscal first-quarter earnings and revenue that exceeded analysts’ expectations, boosting shares 8%.