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The bipartisan infrastructure deal agreed to on Thursday includes $579 billion in new spending over five years that would be used for roads, bridges, public transit, airports, rail, electric buses, EV infrastructure, as well as water, broadband, and power grids.

Photo by Spencer Platt/Getty Images

Stocks mostly rose on Friday to finish their strongest week in months as the market maintains its momentum following Thursday’s gains. 

The Dow Jones Industrial Average gained 238 points, or 0.7%. The  S&P 500 rose 0.3% to a new closing high of 4,280.76 , and the Nasdaq Composite fell 0.1%.

This week has been a strong one for stocks, with the S&P 500 posting its largest one-week percentage gain since February. The Dow snapped its two-week losing streak.

Stocks were also pushed higher Thursday after news broke that the White House and a group of bipartisan lawmakers had agreed to a $1.2 trillion infrastructure deal. If that spending happens, it could serve as a modest boost to economic growth and would create a new revenue stream for construction and manufacturing companies. 

Like Thursday, Friday’s trading saw value stocks outperform growth, as stronger economic growth provides a larger boost to earnings for value companies than it does for growth ones.

Economic data confirmed the view that inflation may be temporary. Consumer spending was flat month-over-month in May, missing estimates of a 0.4% rise. The Core Personal Consumption Expenditure Price Index rose 0.5% in May, missing expectations for a 0.6% increase. This potentially strengthens the narrative that the Federal Reserve—while indicating a higher likelihood of interest rate hikes in 2022—is still on hold from pulling support from the economy.

The data Friday “provided support to the Fed’s argument that inflation is transitory and will help allay fears that we are witnessing runaway inflation,” writes Anu Gaggar, senior global investment analyst for Commonwealth Financial Network. “This should continue to provide support to risk assets such as equities.”

The stock market was signaling a high degree of optimism, as seen in data beyond the major indices’ movements. A breadth of stocks rose, with investors optimistic about the economy and the possibility that interest rates can remain low for a long time. About 81% of S&P 500 stocks rose Friday, according to FactSet data. 

Normally, technology stocks would flourish when investors expect lower inflation and slow Fed rate hikes. Both lower inflation and interest rates boost the value of future profits—and tech companies are expecting growing profits far out into the future. But tech shares have already seen big gains: The Nasdaq 100 Index, which contains large-capitalization tech stocks, is up more than 2% for the week.

“Tech, over the past week, has had an incredible run, so it’s just a cooling off period for tech right now,” says John Ham, advisor and trader at New England Investments and Retirement. 


CSI 300 index

climbed 1.6%, while the

Nikkei 225 index

gained around 0.7%. Australia’s

S&P/ASX 200

rose 0.4%. Part of Sydney will go into lockdown late Friday as a coronavirus outbreak in Australia’s biggest city continues to expand. The

Stoxx Europe 600 index

gained 0.1%.


Banking stocks may be in the spotlight after the Federal Reserve said Thursday that the 23 banks that took this year’s stress test easily passed, and that temporary limits on dividend payments and share buybacks can end after June 30.

Investors will know after the end of trading on Monday how much cash could be handed out.

Capital One Financial

(ticker: COF) stock rose 1.5% and

Wells Fargo

& Co. (WFC) saw shares rise 2.7% on Friday.

Among individual stocks, Nike (NKE) gained 15.5% after reporting a profit of 93 cents a share, beating forecasts for 51 cents a share. Sales were $12.3 billion, above expectations for $11 billion.

FedEx (FDX) stock fell 3.6% after reporting a profit of $5.01 a share, missing forecasts for $5.02 a share. Sales were $22.6 billion, above expectations for $21.5 billion. 

United Rentals (URI) stock initially gained before falling 1.2% after getting upgraded to Buy from Neutral at UBS.  

Netflix (NFLX) stock gained 1.7%. Credit Suisse boosted the stock to Outperform from Neutral. 

BlackBerry (BB) stock fell 4.4% after Canaccord Genuity changed its call to Sell from Hold . 

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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