The Week In Review

6/24/22

The major averages rallied into the close with the Dow Jones Industrial Average rising over 800 points, rebounding off the lows of the bear market last week, and capping the first positive week in June. The Dow finished up 826 points, or 2.7%, with gains accelerating in the final hour of trading. The S&P 500 rose 116 points or 3.1% while the Nasdaq Composite rose 375 points or 3.3%.

The major averages are wrapping up a big comeback week for stocks. The S&P 500 is up 6.5% for the week, while the Nasdaq Composite gained 7.5% and the Dow is 5.4% higher.

Those moves followed the worst weekly decline for the S&P 500 since 2020. Last week, the broader market index closed down 5.8% for the week.

All three major averages were snapped three-week losing streaks, as market participants continued to search for a bottom. Still, many on Wall Street maintained a gloomy outlook.

leapt after a consumer sentiment reading that's closely followed by the Federal Reserve showed a slight easing of inflation expectations.

Consumer sentiment hit a record low reading of 50 in June, according to a University of Michigan survey released Friday morning. While on the surface that is not positive for the market, investors liked a figure inside the report which showed 12-month inflation expectations by consumers easing back to 5.3%.

A preliminary reading earlier this month that was pivotal in influencing the Fed to get more aggressive with its rate hike showed inflation expectations at 5.4%.

Cruise line stocks led the S&P 500 gains. Shares of Carnival Corporation rallied 12.4% after the company reported booking volumes in its most recent quarter were "nearly double" the volumes in the first quarter, meaning the company saw its "best quarterly booking volumes since the beginning of the pandemic."

Royal Caribbean Group surged 15.8%. Norwegian Cruise Line Holdings' gained 15.4%.

Financials were the best-performing sector in the broader market index after the Federal Reserve released the results of its annual "stress test." The central bank said a succession of the nation's largest banks have strong pools of capital to weather a severe recession.

Wells Fargo's stock price jumped 7%. Capital One's popped 6%.

On the corporate front, shares of FedEx surged 7% despite a mixed fourth-quarter report after the logistics company delivered an upbeat earnings forecast.

Volatility on Wall Street is expected to be elevated Friday, as FTSE Russell completes its annual index rebalancing, shifting the makeup of tracking indexes that contain trillions of dollars. Rebalancing days are typically accompanied by heavy trading volumes as well.

Among the biggest changes will be the additions of tech companies such as Meta and Netflix to the Russell 1000 value index after their stock tumbles this year, according to a Wall Street Journal report. Shares of Meta and Netflix spiked 6% and 5%, respectively.

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