The Dow Jones Industrial Average and S&P 500 hit another round of fresh all-time highs on Friday as both indexes ended the week with modest gains despite increased Delta variant concerns.
For the week, the Dow and S&P 500 added small gains of 0.87% and 0.71%, respectively, as market participants traded lightly throughout the week. The tech-heavy Nasdaq was the week's underperformer, ticking down just under 0.10%.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Wall Street no longer fears inflation, turns attention to Delta variant, says HSBC:
HSBC's
In a note, Chief Investment Officer Xian Chan wrote that after a period of concern surrounding lasting inflationary pressures, leading investors to anticipate the Federal Reserve to tighten its loose monetary policy, Wall Street now appears to have become more comfortable with inflation, CNBC reports.
Xian cited that while U.S. consumer price inflation came in at a hot 5.4% annual rate in July, the 10-year U.S. Treasury yield declined, indicating that investors have "nothing to fear but fear itself" when inflation is concerned, CNBC reports.
"There is normally a direct relationship between bond yields and inflation expectations. If inflation is expected to be higher, then bond yields go up to reflect the likelihood of higher interest rates. But interestingly, bond yields have come down after peaking in April," Chan wrote, quoted by CNBC.
Consumer confidence sharply drops to pandemic low:
Consumer confidence plunged lower in the first half of August, with consumers mostly concerned that the highly contagious Delta variant's surge across the nation will have a negative impact on economic recovery.
The University of Michigan's headline monthly sentiment index dropped to 70.2 in August from 81.2 in July, according to the month's preliminary print. August's level become a new pandemic-era low, falling slightly below the April 2020 low of 71.8.
"Consumers reported a stunning loss of confidence in the first half of August," Richard Curtin, chief economist for the Surveys of Consumers, said in a press statement. "There is little doubt that the pandemic's resurgence due to the Delta variant has been met with a mixture of reason and emotion. Consumers have correctly reasoned that the economy's performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end."
Here's how market started trading soon after open:
S&P 500 Index: +0.11% or +4.86 points to 4,465.69
Dow Jones Industrial Average: +0.24% or +84.96 points to 35,584.81
Nasdaq Composite Index: +0.02% or +3.54 points to 14,818.42
