US stocks rallied strongly on Friday, driven by robust earnings from tech giant Apple (AAPL) and heightened expectations of a Federal Reserve interest rate cut. Dow Jones Industrial Average futures surged over 450 points, with S&P 500 and Nasdaq 100 futures also posting significant gains. This optimism followed a weaker-than-expected jobs report for April, reigniting speculation that the Fed may move to cut rates earlier than previously anticipated.
The April jobs report revealed a softer-than-expected labor market, with employers adding 175,000 jobs compared to economists’ projections of 240,000. Notably, the unemployment rate unexpectedly rose to 3.9%. This data spurred traders to increase bets on a rate cut by the Fed. According to the CME FedWatch tool, the probability of a rate cut at the Fed’s July meeting surged to around 50%, a significant rise from Thursday’s figures.
Apple emerged as the standout performer among corporates on Friday, surpassing earnings expectations and demonstrating resilience in the face of challenges, particularly in China. The company’s quarterly profit beat estimates, and it surprised investors with stronger-than-expected revenue from China, despite concerns over iPhone sales. CEO Tim Cook highlighted Apple’s focus on artificial intelligence (AI) development, signaling a strategic direction in this earnings season. However, it was Apple’s announcement of a massive $110 billion stock buyback, the largest in US history, that captured the market’s attention. This move propelled Apple shares nearly 7% higher in early trading, providing a significant boost to the Dow.
In addition to Apple’s stellar performance, heavyweight Amgen (AMGN) also contributed to the Dow’s gains. The biopharmaceutical company’s shares surged 13% following comments from its CEO, suggesting its obesity drug could challenge market leaders such as Novo Nordisk (NVO). This unexpected development further energized the market, particularly in the healthcare sector.
The surge in US stocks on Friday was fueled by a combination of strong corporate earnings, led by Apple, and renewed hopes for a Fed rate cut in the wake of a softer jobs report. Investors responded positively to Apple’s impressive financial results and the company’s aggressive stock buyback plan, driving market sentiment higher. Additionally, optimism in the healthcare sector, buoyed by Amgen’s potential market disruption, added to the bullish tone in the market. As the focus shifts to upcoming economic data and corporate earnings, investors remain cautiously optimistic about the future trajectory of US stocks.
