4:20pm: Wall Street ends week on a high note
The Nasdaq led a broad market rally on Friday, surging 1.5% to close at 19,630, gaining 292 points to capp off the best week for Wall Street since November.
The tech-heavy index was buoyed by significant gains in Big Tech stocks, with all members of the "Magnificent Seven" climbing at least 1%.
The S&P 500 also posted impressive gains, rising 1% to end the session at 5,997, adding 59 points. This pushed the benchmark index to its first winning week in the last three.
The Dow Jones advanced 0.8%, or 335 points, to finish at 43,488. Meanwhile, the Russell 2000, representing smaller companies, saw more modest gains of 0.4%, adding 9 points to close at 2,276.
Friday's rally was fueled by a combination of factors, including better-than-expected bank earnings and optimism about potential interest rate cuts. The market's positive momentum also reflected investor confidence in the resilience of the U.S. economy, despite mixed economic data released earlier in the week.
Markets will be closed on Monday in recognition of Martin Luther King Jr day.
2:33pm: Industrial production surges
US industrial production surged by 0.9% in December 2024, marking the strongest monthly growth in 10 months, significantly exceeding analysts' expectations of 0.3% growth and three times higher than the 0.2% growth recorded in November.
The 0.9% increase in industrial production was largely driven by a 6.3% gain in civilian aircraft production, Wells Fargo noted, masking an otherwise lackluster year for manufacturing.
Despite this end-of-year boost, the overall manufacturing index for 2024 remained flat at 99.3, unchanged from 2023.
While some sectors showed strength, particularly high-tech industries and chemicals, most industries experienced flat or declining growth throughout 2024. This stagnation was primarily due to reduced capital expenditure demand, caused by factors such as limited liquidity, high interest rates, and economic uncertainty.
The divergence between business and consumer goods output highlights the contrast between sluggish business investment and resilient consumer spending, according to Wells Fargo. Small business sentiment improved following the election, with optimism surrounding potential deregulation and tax policy changes. However, uncertainty regarding future tariff policies continues to make many businesses cautious about new capital expenditures.
12:57pm: Investors positive
The three major stock indexes remained in positive territory on Friday afternoon, buoyed by a slew of encouraging data this week including positive housing numbers.
The Nasdaq led the gains, adding 1.7% while the S&P 500 was up 1.2% and the Dow Jones was up 1%.
"Housing starts in the US soared by over 15%, their biggest surge since March 2021, while building permits decreased slightly but beat expectations, leading to more strong gains in US stocks,” IG senior technical analyst Axel Rudolph said.
“US industrial output growth at a 10-month high also contributed to the positive sentiment."
11:25am: Positive residential construction data - or is it?
Residential construction ended 2024 on a positive note, according to Wells Fargo.
"Both single family and multifamily construction improved during the month," analysts wrote.
"The jump in overall starts, however, largely was owed to an eye-catching 61.5% rise in multifamily starts, a category which is highly volatile on a monthly basis."
Permitting data paints a different picture, however.
"Overall, the trend in single-family has been essentially flat over the past several months as high mortgage rates and elevated inventory levels continue as headwinds for construction," Wells Fargo commented.
"Meanwhile, multifamily permits fell 5% during the month, dashing hopes that the jump in starts is an inflection point for multifamily development still weighed down by tight credit and soft apartment market conditions."
9.54am: Wall Street rallies at open
Wall Street was in a positive mood as stocks rebounded sharply at the start of trading on Friday.
The Nasdaq jumped 1.3% following the opening bell, while the S&P 500 and Dow Jones added 0.8% and 0.7% respectively.
Gains came as bond yields dropped further early on and followed declines across the board on Thursday, as stocks receded from a rally on revived rate cut hopes thanks to soft core inflation data for December on Wednesday.
Overnight, China reported its embattled economy hit targeted growth of 5% last year thanks to a rebound in the final quarter.
According to the country’s the National Bureau of Statistics, gross domestic product “recovered remarkably” over the final three months of the year.
Growth came in at 5.4% for the year as a result, moderating against 2023’s 5.2% but surpassing expectations for 4.9%.
A quieter Friday back in the US saw housing starts come into focus, with new building projects trouncing expectations, having grown by 15.8% units in December.
Among companies, Intel Corp was among the big risers early on, jumping 8.1% on speculation the company had emerged as a potential acquisition target.
Nvidia Corp also regained after dipping on Thursday following worries around chip delays and order cuts earlier in the week, leading the likes of Amazon.com Inc and Apple Inc higher.
7.41am: Stocks to bounce back
Wall Street appeared on course to bounce back on Friday following a volatile week that saw stocks rally on soft inflation data before easing back.
Futures had the Nasdaq, Dow Jones and S&P each adding around 0.4% ahead of Friday’s opening bell.
The trio fell on Thursday following a rally in the wake Wednesday’s soft core inflation data for December, which saw hopes for a Federal Reserve rate cut this year reappear.
Nasdaq had led the drop, falling by 0.9%, with Swissquote Bank analyst Ipek Ozkardeskaya pointing to dovish commentary from the Feds Christopher Waller, but ongoing jitters around inflation.
“The energy and goods inflation is under control, but the core services inflation remains pretty sticky,” Ozkardeskaya said.
“Donald Trump’s tariff threats and plans to jolt the energy space with further sanctions against oil-producing countries like Iran, Russia and Venezuela, threaten to maintain the upside pressure in oil prices this year.”