New York
CNN
—
US stocks rallied Friday as investors tried to stage a rebound to finish a rocky week, though all three major indexes were still on track to close the week in the red.
The Dow rose 530 points, or 1.3%, in afternoon trading, pulling back from surging as much as 670 points earlier. The broader S&P 500 rose 1.7% and the Nasdaq Composite gained 2.1%.
The rebound comes after a steep decline on Thursday that saw the S&P 500 close in correction territory, down more than 10% from its recent high, for the first time since late 2023.
The benchmark index shed roughly $5.28 trillion in market value from its peak on February 19 to market close on March 13, according to FactSet data.
Despite the Friday rally, the S&P 500 and Nasdaq were on track for their fourth consecutive week in the red, which would be their worst losing streak in seven months.
While the Dow’s gains on Friday pared some of this week’s losses, the blue-chip index as of Friday afternoon was still down more than 3% this week and on track for its worst week since March 2023.
US stocks rallied on the news that lawmakers would likely pass a government funding plan Friday, avoiding a shutdown. Markets hate uncertainty, and the clarity of dodging a shutdown provided a boost for stocks at the end of a turbulent week.
President Donald Trump’s tariffs have roiled markets this month, and recent drawdowns can also present opportunities for rebounds.
“The markets are grappling with the notion of where fair value rests for a stock market that faces headwinds from tariffs, fiscal spending cuts and potentially softening economic data,” said Yung-Yu Ma, chief investment officer at BMO Wealth Management, in an email.
All three major indexes opened higher Friday and held on to their gains despite a fresh read on consumer sentiment that showed Americans are souring on the economy.
Consumer sentiment fell 11% this month to a reading of 57.9, a preliminary reading showed, down from last month’s reading of 64.7 and reaching its lowest level since November 2022, according to the latest consumer sentiment survey from the University of Michigan.
Stocks driving markets higher on Friday included tech and AI stars like Nvidia (NVDA) and Palantir (PLTR) that were rebounding after a slide in the past month.
Gold on Friday surged to a record high, breaking through $3,000 a troy ounce. Gold prices have soared as investors demand safe havens amid uncertainty around the impact of Trump’s tariffs on global economic growth and geopolitical stability.
The skyrocketing price of gold is among several signs that investors are concerned about America’s economic outlook, former Treasury Secretary Larry Summers told CNN on Friday.
“It’s a sign of the amount of uncertainty that’s being created that amidst everything else, the asset that’s done well is gold,” Summers told CNN’s Pamela Brown and Wolf Blitzer. “That’s what people do when they don’t have confidence in the people who are managing the country.”
Gold prices rallied 27% in 2024, smashing through previous record highs.
In addition to investor demand, central banks — led by China — have been increasing their gold reserves, pushing prices higher. Russia’s war in Ukraine is another factor contributing to higher gold prices.
“Russia’s rejection of the US-proposed 30-day ceasefire in Ukraine has reignited geopolitical instability,” said Viktoria Kuszak, a research analyst at Sucden Financial, a trading firm.
Gold is up about 15% already this year, far outpacing the benchmark S&P 500, which is down more than 4%.
Goldman Sachs in February raised its year-end price forecast for gold to $3,100 a troy ounce.
“Extreme fear” has been the sentiment driving markets since the end of February, according to CNN’s Fear and Greed Index.
