Wall Street Bounces Back Friday But Weekly Damage Already Done

It’s that weird market vibe: one good day doesn’t erase a brutal week. Here’s what went down.

The Rebound (Finally)

After Thursday’s bloodbath, the U.S. stock market decided to play catch-up on Friday. All three major indices posted solid gains by day’s end:

• Dow: +1.1% (493 points) to 46,245
• S&P 500: +1.0% (64 points) to 6,603
• Nasdaq: +0.9% (195 points) to 22,273

But here’s the kicker—they all pulled back from their best levels going into the close. You know that feeling when you almost save a bad week? Yeah, this wasn’t quite it.

The Weekly Scoreboard (Ouch)

Friday’s green can’t hide the carnage from Monday-Thursday:

• Nasdaq: -2.7% (worst performer)
• S&P 500: -2.0%
• Dow: -1.9%

Both the Nasdaq and S&P hit their lowest levels in over 2 months. Not ideal.

Why the Rally? The Fed Bets

Markets are now pricing in a 71.5% chance of a quarter-point rate cut in December—up from just 39.1% on Thursday. That’s a massive swing in expectations.

What triggered the shift? New York Fed President John Williams said monetary policy is “modestly restrictive” and there’s “room for further adjustment” ahead. Translation: rate cuts could keep coming.

Add to that fresh inflation data from the University of Michigan showing both near-term and long-run inflation expectations dropped in November. That’s the kind of headline the Fed wants to see.

But Plot Twist

The Fed’s meeting minutes just dropped, and officials apparently have “strongly differing views” on whether December is the right month to cut rates. So don’t pop the champagne yet.

Sector Winners

Housing stocks led the charge (+4.0%), followed by airlines (+3.0%). Biotech, oil services, healthcare, and computer hardware also jumped on the optimism.

Global Picture

Asia got hit hard: Japan’s Nikkei and Hong Kong’s Hang Seng both down 2.4%, South Korea’s Kospi crashed 3.8%. Europe was mixed—Germany down 0.8%, but the U.K. scraped out a tiny 0.1% gain.

In bonds, the 10-year yield slid 4.3 basis points to 4.063% as investors rotated into safer assets.

What’s Next

Next week brings delayed economic data: retail sales, producer prices, durable goods. Markets could swing hard either way depending on those numbers.