Dow Jones: 3M’s Best Day Since 1972 Boosts Industrials, Lifts Market Sentiment

Market Rebound Caps Volatile Week

The U.S. stock market staged a strong recovery on Friday, ending a tumultuous week on a positive note. The Dow Jones Industrial Average surged over 600 points, led by an exceptional performance from 3M.

At 14:08 GMT, the Dow Jones Industrial Average is trading 40501.17, up 566.10 or +1.42%. The S&P 500 Index is at 5439.58, up 40.36 or +0.75% and the Nasdaq is trading 17258.28, up 76.56 or +0.45%.

Sector Performance

Industrial giant 3M dominated headlines, soaring more than 15% and heading for its best day since at least 1972. This stellar performance propelled the industrials sector, which gained 1.8% on the day.

The technology sector, despite its recent struggles, showed signs of life with a 0.9% daily increase. However, it remains down 3.5% for the week, highlighting the ongoing rotation away from growth stocks.

Health care emerged as a bright spot, posting both daily (1.16%) and weekly (0.77%) gains. This defensive sector’s resilience underscores investor caution amid market volatility.

Inflation Data and Market Reaction

Investors closely analyzed the Personal Consumption Expenditures (PCE) price index, a key inflation metric. The headline PCE rose 0.1% monthly and 2.5% annually, aligning with economists’ expectations. This data provided some relief, contributing to the market’s positive sentiment.

Weekly Sector Shifts

The communication services sector faced significant headwinds, on track for its worst week since October 2023 with a 4.63% decline. Tech giants Alphabet and Meta Platforms were notable laggards.

Conversely, utilities joined health care as the only S&P 500 sectors in positive territory for the week, emphasizing a shift towards defensive positioning.

Market Forecast

While Friday’s rebound is encouraging, the week’s volatility suggests caution. The momentum factor’s recent weakness, particularly in large-cap tech stocks, indicates a potential continuation of the rotation into small caps and cyclical sectors.

The market’s reaction to inflation data and earnings reports will be crucial in the short term. Investors should remain vigilant, as the tug-of-war between growth concerns and inflation fears is likely to persist, potentially leading to further market swings in the coming weeks.

Technical Analysis

E-mini Dow Jones Industrial Average futures are trading sharply higher. The new short-term range is 41672 to 40053, making its 50% and 61.8% targets at 40863 and 41053, respectively, the next upside targets.

On the downside, the major support is the 50-day Moving Average at 39808.