Dow Jones jumps 700 points on latest earnings, inflation data: Live updates

Most companies that have reported results so far this season have exceeded Wall Street expectations.

More than 40% of S&P 500 companies reported quarterly financial results Friday morning, according to FactSet data. Of those, more than 78% beat analysts’ consensus forecasts.

Several big names in finance are set to report results next week as earnings season continues. That list includes several large-cap tech stocks like Microsoft, Meta, Amazon and Apple. McDonald’s and Boeing are also set to report results this week.

— Alex Harring, Robert Hum

Consumer optimism declined slightly in July, but the inflation outlook fell to its lowest level in more than three and a half years, according to the University of Michigan’s final consumer survey released Friday.

The general sentiment index fell slightly to 66.4, better than the Dow’s estimate of 66 but below June’s reading of 68.2.

Regarding inflation, the revised one-year outlook showed a forecast of 2.9%, matching the lowest level since December 2020 for several months. The five-year outlook was 3%, a level at which it has remained for the past four months.

—Jeff Cox

The Dow Jones Industrial Average jumped 500 points, or 1.2 percent, led by 3M.

The industrial giant jumped 14% on better-than-expected second-quarter results. UnitedHealth, Visa, Merck and Home Depot each gained about 2%.

Five stocks were down early in the morning. The Dow was the biggest decliner, down 0.6%.

— Samantha Subin

Stocks opened higher on Friday to cap a week of volatile trading.

The Dow Jones Industrial Average jumped 280 points, or 0.7%. The S&P 500 gained 0.6%, while the Nasdaq Composite jumped 0.8%.

— Samantha Subin

Thursday’s losses in the S&P 500 and Nasdaq Composite continued to show a weakening of the momentum factor, or the idea that stocks that have outperformed will continue to do so in the near future, according to Wolfe Research.

“While small caps continued to shine, the big loser of the day was the momentum factor,” Wolfe Research’s Rob Ginsberg wrote Thursday. “After a brief, lackluster oversold bounce, momentum reversed sharply today to close below support as the high we discussed continues to resolve lower.”

-Sarah Min

The household consumption expenditures price index rose 0.1% month-on-month and 2.5% year-on-year in June, matching estimates from economists polled by Dow Jones. Core inflation, which excludes food and energy, rose 0.2% month-on-month and 2.6% year-on-year, also in line with expectations.

—Fred Imbert

Here are the stocks that moved the most in pre-market trading:

• Coursera — Shares of the online course provider jumped 26% after Coursera reported second-quarter revenue of $170 million, topping the $164 million analysts had expected, according to LSEG.
• WW International — The parent company of Weight Watchers fell 5.3% after Morgan Stanley downgraded its rating from overweight to equal weight.
• Dexcom — The medical device stock fell more than 36% after the company reported lower second-quarter revenue.

Read the full list of moving actions here.

—Lisa Kailai Han

The current strength in the small-cap sector represents a “significant rotation not seen in decades,” according to George Maris, chief investment officer and global head of equities at Principal Asset Management.

Small caps have only managed to outperform large caps twice in the past 30 years: during the Covid-19 pandemic and during the dot-com bubble in 1999 and 2000, according to Maris.

“These are historic levels, and we’re at such a point right now, so this rotation has staying power because everyone is out of the game,” Maris said.

The earnings expansion should lead to greater optimism around the small-cap sector, the investor added. Going forward, earnings growth from lower interest rates will help smaller companies, Maris noted.

“The market, outside of the Mag 7, looks relatively normal over the long term and, in fact, in the small cap space, it looks quite interesting. … There are very bullish arguments for being long small caps,” Maris said.

The Russell 2000 index is up 1.8% since the start of the week and up about 8.6% in July.

—Hakyung Kim

The communications services sector is on track for its worst week since October 2023 as investors flee tech giants.

The sector’s weekly losses totaled 4.63% through Thursday’s close. Alphabet shares were among the notable losers, down 5.8% week-to-date, while Meta Platforms fell 4.9%.

The information technology sector also struggled on Friday, down 3.5% for the week. A 16.7% drop in CrowdStrike this week and a 4.8% drop in Nvidia contributed to the sector’s losses.

The healthcare and utilities sectors, traditionally considered defensive, are the only two S&P 500 sectors that are positive for the week, up 0.77% and 0.48% respectively.

— Darla Mercado, Chris Hayes

Steve Eisman, known for his film “The Big Short,” believes the recent tech-related market pullback is driven more by emotion than fundamental deterioration.

“Rotations are always violent. They always catch everybody off guard. And this is not a fundamental correction. This is like a psychological rotation,” Eisman said on CNBC’s “Fast Money.”

Neuberger Berman’s senior portfolio manager said there was nothing alarming about the economy as a whole.

“I don’t think the fundamentals have really changed much,” he said. “The only negative I would point out is that consumer spending seems to have slowed a little bit and delinquencies are up a little bit.”

-Yun Li

Check out the companies making headlines after hours trading:

• Dexcom — Shares of the medical device company fell more than 35%. Dexcom’s full-year revenue forecast of $4 billion to $4.05 billion marked a cut from the outlook it provided earlier in the year. Second-quarter revenue fell short of analyst expectations, coming in at $1 billion versus consensus estimates of $1.04 billion, according to LSEG. Shares of Insulet fell 9.1% in sympathy.
• Boston Beer Company — The maker of Twisted Tea and Samuel Adams shares fell 5% after second-quarter results missed expectations. Boston Beer reported earnings of $4.39 per share on revenue of $579 million, while analysts had expected earnings of $5.02 per share on revenue of $597 million, according to LSEG.
• Coursera — Shares of the online course provider jumped 16%. Second-quarter revenue was $170 million, topping analysts’ estimates of $164 million, according to LSEG. Coursera posted a loss of 15 cents per share, while the New York Stock Exchange forecast a profit of 1 cent per share.

For the full list, read here.

— Pia Singh

Stock futures were up shortly after 6 p.m. ET.

Dow Jones Industrial Average futures gained 64 points, or 0.16%. S&P and Nasdaq 100 futures each gained 0.1%.

— Pia Singh