Wall Street Bounces Back As Shutdown Risks Fade, Stocks Eye Strongest Day In 4 Months: What's Driving Markets Friday?

Stocks staged a sharp rebound on Friday as concerns over a potential government shutdown eased after Senate Minority Leader Chuck Schumer (D-NY) opted not to veto a Republican spending bill.

The S&P 500 jumped 1.9%, eyeing track for its strongest daily rally since November 6, 2024, when investors piled into equities following Donald Trump‘s presidential election victory.

Tech stocks and small caps both gained 2.3%, while the Dow Jones Industrial Average advanced 1.5%.

Despite Friday's gains, the broader market remains deeply in the red for the week, with the S&P 500 heading for its fourth consecutive weekly decline, marking the longest losing streak since May 2022.

All S&P 500 sectors traded in positive territory on Friday, though only utilities and energy are poised to end the week with gains.

Economic data painted a concerning picture. The University of Michigan’s consumer sentiment index fell more than anticipated, while inflation expectations spiked. A key gauge tracking five-year forward inflation expectations among consumers climbed to 3.9%, the highest level since March 1993.

Bitcoin (CRYPTO: BTC) surged 4% to $84,000, flipping to weekly gains and lifting other crypto-related assets. Meanwhile, gold, as tracked by the SPDR Gold Trust (NYSE:GLD), was flat on the day but reached a historic milestone, hitting $3,000 per ounce for the first time ever.

The precious metal is on pace to post its tenth positive week in the past eleven, outperforming all major asset classes year-to-date.

Stock markets also rallied worldwide. Chinese equities soared on expectations of increased government stimulus, while European stocks surged after Germany secured a historic deal to raise its debt ceiling.

Friday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) rose 1.8% to $561.04.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) rose 1.5% to $414.39.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) rallied 2.3% to $477.99.
• The iShares Russell 2000 ETF (NYSE:IWM) surged 2.3% to 203.12
• The Energy Select Sector SPDR Fund (NYSE:XLE) outperformed, up 2.6%; the Consumer Staples Select Sector SPDR Fund (NYSE:XLP) was the laggard, up 0.1%.

Friday’s Stock Movers

Stocks reacting to earnings report included:

• DocuSign Inc. (NASDAQ:DOCU), up 17%,
• Ulta Beauty Inc. (NASDAQ:ULTA), up 12.4%,
• Li Auto Inc. (NASDAQ:LI), down 3.1%,
• Wheaton Precious Metals Corp. (NYSE:WPM), up 1.8%,
• Crown Castle Inc. (NYSE:CCI), up 8.7%.

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