After Volatile August, S&P 500 Index Extends Rally to Fourth Consecutive Month

Barry Adams
30 Aug, 2024
New York City

Market indexes advanced on the final trading day of August and are set to end the volatile month on a higher level. 

The S&P 500 index trimmed its weekly losses to 0.2%, and the Nasdaq Composite trimmed its weekly losses to less than 1%. 

In August, the S&P 500 index advanced 2.0% and the Nasdaq Composite gained 0.2%. 

Investor sentiment recovered from sharp losses of as much as 10% over the two-week period ending in the first week in August, driven by the fears of an economic slowdown and weakening labor market conditions. 

However, those fears turned out to be unfounded after a string of positive economic data in the second half of the month, fueling a market rally that lasted three weeks. 

Market sentiment also improved after Fed Chair signaled "monetary policy adjustment," providing another boost to the broader market rally last week. 

On Friday, the Fed's alternative measure of inflation highlighted mixed picture on the inflation front. 

The Core Personal Consumption Expenditure Price Index increased on a monthly basis by 0.2%, matching the increase in the previous month, the Bureau of Economic Analysis reported Friday. 

The overall index rose 0.2% on a monthly basis, matching expectations set by several economists. 

On an annual basis, the overall PCE price index advanced 2.5%, matching the rate in the previous month, indicating prices are still rising at a pace faster than the Fed's 2% target rate. 

The core PCE price index, which excludes volatile food and energy prices, rose 2.6% and held steady for the third month in a row. 

Investors are still anticipating that the Federal Reserve is ready to start its interest rate cycle as early as next month, but those hopes could be dashed if policymakers decide to wait for more evidence for the downward path for inflation. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.6% to 5,627.04, the Nasdaq Composite rose 0.9% to 17,668.90, and the Russell 2000 index gained 0.6% to 2,202.98. 

The yield on 2-year Treasury notes edged higher to 3.92%, 10-year Treasury notes increased to 3.86%, and 30-year Treasury bonds inched lower to 4.14%.

WTI crude oil increased $0.01 to $75.92 a barrel, and natural gas prices edged down 3 cents to $2.16 a thermal unit.

Gold rose by $2.20 to $2,521.75 an ounce, and silver increased by $0.20 to $29.57.

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher to 101.36.

 

U.S. Stock Movers

Lululemon gained 3.9% to $269.0, and the athletic retailer reported mixed quarterly results. 

Revenue in the latest quarter increased to $2.37 billion, and diluted earnings per share were $3.25, beating the estimates by at least 20 cents. 

However, comparable sales increase slowed sharply to 2% from as high as 7% in the fourth quarter of 2023 and flat in the first quarter of this year. 

Ulta Beauty dropped 7.1% to $341.50, and the cosmetic retailer reported weaker-than-estimated second quarter sales, and the company lowered its full-year outlook after comparable store sales declined. 

Dell Technologies increased 5.2% to $116.44, and the personal computer and data server company reported earnings ahead of market expectations. 

MongoDB soared 17% to $289.10, and the database developer's revenue and earnings were ahead of market expectations. 

Revenue in the fiscal second-quarter ending in July increased 13% to $478.1 million, net loss advanced to $54.5 million from $37.6 million, and diluted loss per share expanded to 74 cents from 53 cents a year earlier. 

The company guided full-year revenue to range between $1.92 billion and $1.93 billion, from the previous range between $1.88 billion and $1.90 billion. 

The company also lifted its adjusted earnings per share outlook to between $2.33 and $2.47 from the previous estimate between $2.15 and $2.30. 

Gap Inc. declined 1.5% to $22.57 after the specialty apparel retailer reported revenue and earnings that surpassed market expectations. 

Revenue in the quarter that ended on August 3 rose 5% to $3.72 billion from $3.55 billion, net income advanced to $206 million from $117 million, and diluted earnings per share rose to 54 cents from 32 cents a year ago.