Stocks jumped Friday{

Stocks finish higher, Dow jumps more than 600 points

Stocks finish higher on Friday to cap off a volatile trading week.

The Dow Jones Industrial Average rallied 654.27 points, or 1.6%, to finish at 40,589.34. The S&P 500 climbed 1.1% to end at 5,459.10, while the Nasdaq Composite gained 1% to close at 17,357.88.

— Samantha Subin

The Dow Jones Industrial Average rallied 654.27 points, or 1.64%, to finish at 40,589.34. The S&P 500 climbed 1.11% to end at 5,459.10, while the Nasdaq Composite gained 1.03% to close at 17,357.88.

Friday's moves stem from a combination of oversold sentiment, a stronger-than-expected GDP report Thursday and the view that the Federal Reserve will begin cutting rates due to economic resilience, said CFRA Research's Sam Stovall.

"Today's benign PCE report helped talk the market off the ledge," he added. "With this pullback, the great rotation lives on and breadth continues to be on our side."

Investors continued their pivot into cyclical areas of the market and small caps, with the Russell 2000 rising 1.67%. Industrials and materials stocks rose, lifting their respective S&P sectors about 1.7%. 3M{

3M leads Dow's more than 500-point gain

The Dow Jones Industrial Average popped 500 points, or 1.2%, led to the upside by 3M.

The industrial giant popped 14% on stronger-than-expected second-quarter earnings. UnitedHealth, Visa, Merck and Home Depot added about 2% each.

Five stocks were negative in early-morning trading. Dow was the biggest laggard, inching down 0.6%.

— Samantha Subin

3M leads Dow's more than 500-point gain

The Dow Jones Industrial Average popped 500 points, or 1.2%, led to the upside by 3M.

The industrial giant popped 14% on stronger-than-expected second-quarter earnings. UnitedHealth, Visa, Merck and Home Depot added about 2% each.

Five stocks were negative in early-morning trading. Dow was the biggest laggard, inching down 0.6%.

— Samantha Subin

3M heads for best day in more than half a century

3M shares tracked for their best day in more than 50 years on the back of better-than-predicted earnings.

The office suppliers maker jumped more than 21% in afternoon trading. If that holds through Friday's closing bell, it will mark the stock's biggest one-day gain since at least 1972.

Friday's jump comes after the company easily beat expectations of analysts on both lines for the second quarter. 3M earned $1.93 per share, excluding items, on $6.26 billion in revenue, while analysts expected just $1.68 in earnings per share and $5.88 billion in revenue.

3M was the best performer in the blue-chip Dow in Friday afternoon trading. Shares also touched a new 52-week high amid the rally.

With this advance, shares are up more than 37% on the year.

— Alex Harring

Some technology names that have struggled amid this week's sell-off gained, with Microsoft and Amazon adding more than 1% each. Meta Platforms climbed nearly 3%. The S&P's information technology sector surged about 1%.

Wall Street also assessed June's personal consumption expenditures price index, an inflation reading that is preferred by central bank policymakers. On a monthly basis, headline PCE rose 0.1%{

Fed's preferred inflation gauge matches expectations

The personal consumption expenditures price index rose 0.1% month over month and 2.5% from a year ago in June, matching estimates from economists polled by Dow Jones. Core inflation, which excludes food and energy, gained 0.2% for the month and 2.6% on the year, also in line with expectations.

— Fred Imbert

This positive inflation news has also lifted investor hopes for more rate cuts this year, with the fed funds futures market pricing in cuts in September, November and December.

"The numbers have been coming in tamer," said Ken Mahoney, president of Mahoney Asset Management. "In housing and real estate, you're starting to see some cracks. They're going to stop messing around, start cutting rates."

That data comes at the end of a volatile week on Wall Street. The S&P 500 declined 0.8%, while the Nasdaq lost 2.1%. Both indexes posted back-to-back weekly losses for the first time since April. The Dow outperformed, adding 0.8%, and notching its fourth consecutive positive week for the first time since May. The action came as investors seemed to participate in a rotation into small caps and cyclicals.

In other news, medical device maker Dexcom plunged 41% after releasing disappointing fiscal full-year guidance. Footwear company Deckers reported fiscal first-quarter earnings and revenue that exceeded analysts' expectations, boosting shares 6%.

Stocks finish higher, Dow jumps more than 600 points

Stocks finish higher on Friday to cap off a volatile trading week.

The Dow Jones Industrial Average rallied 654.27 points, or 1.6%, to finish at 40,589.34. The S&P 500 climbed 1.1% to end at 5,459.10, while the Nasdaq Composite gained 1% to close at 17,357.88.

— Samantha Subin

3M heads for best day in more than half a century

3M shares tracked for their best day in more than 50 years on the back of better-than-predicted earnings.

The office suppliers maker jumped more than 21% in afternoon trading. If that holds through Friday's closing bell, it will mark the stock's biggest one-day gain since at least 1972.

Friday's jump comes after the company easily beat expectations of analysts on both lines for the second quarter. 3M earned $1.93 per share, excluding items, on $6.26 billion in revenue, while analysts expected just $1.68 in earnings per share and $5.88 billion in revenue.

3M was the best performer in the blue-chip Dow in Friday afternoon trading. Shares also touched a new 52-week high amid the rally.

With this advance, shares are up more than 37% on the year.

— Alex Harring

Talking about substantial number of rate cuts is ‘premature,’ Torsten Slok says

Apollo's Torsten Slok still thinks that discussion around more interest rate cuts in the future is "premature" following Friday's PCE report.

"At the end of the day, if the strength of the economy is still running the risk here that we might get another … flare up or more tailwinds to the economic outlook, then I do think it's premature to take out the champagne bottle and begin to talk about a dramatic amount of rate cuts coming," the firm's chief economist told CNBC's "Squawk on the Street."

Slok said that while the Federal Reserve may make a cut in September, there needs to be more progress on inflation. He added that he doesn't believe some weakness in certain labor market indicators justifies the pricing of three cuts this year.

"I still think that the economy is doing quite well," he continued.

— Sean Conlon

Fed should be cutting interest rates right now, Wharton's Jeremy Siegel says

The Federal Reserve should already be lowering interest rates, according to Jeremy Siegel, a finance professor at the University of Pennsylvania's Wharton School.

"If it were up to me, looking forward, they should be," he said on CNBC's "Squawk Box" on Friday morning.

Siegel also said the story of forward-looking inflation looks good for the central bank. He said investors should expect Fed Chair Jerome Powell to "tee up" a rate cut coming in September.

— Alex Harring

See the stocks moving midday

These are some of the stocks making the biggest moves in midday trading on Friday:

• 3M — Shares surged more than 18% to hit a 52-week high after the maker of office supplies and adhesives reported stronger-than-expected quarterly results. 3M posted second-quarter adjusted earnings of $1.93 per share, exceeding an LSEG estimate of $1.68 per share. Revenue also topped Wall Street's forecast.
• Dexcom — Shares plummeted more than 40% after the medical device maker missed expectations for second-quarter revenue and offered soft full-year guidance for the measure. Dexcom said it earned $1 billion in revenue during the three-month period, under the consensus forecast of $1.04 billion from analysts polled by LSEG.
• Coursera — The online course provider soared 37.8% after reporting $170 million in second-quarter revenue, above the consensus estimate of $164 million from analysts surveyed by LSEG.

See the full list here.

— Alex Harring

Newell Brands mounts historic rally following earnings

Shares of Newell Brands headed for their best day ever after posting stronger earnings per share than Wall Street anticipated.

Newell climbed almost 40% in Friday's session, putting shares on track to notch their best one-day performance in the stock's history. The Yankee Candle and Rubbermaid parent has been public for several decades.

The company, which also houses brands such as Sharpie and Coleman, earned 36 cents per share, excluding items, in the second quarter. That is 15 cents higher than analysts polled by LSEG expected.

On the other hand, Newell posted $2.03 billion in revenue, slightly under the $2.05 billion anticipated by Wall Street.

Despite Friday's historic rally, shares are up less than 2% on the year. Currently, the stock's best completed day in history took place in 1975, when it gained more than 20% but traded for less than $1.

— Alex Harring

Small-cap value is outperforming. Focus on profitable stocks, strategist says

The Russell 2000 is up 1% on the day and nearly 4% for the week. The long underperforming small-cap index is on track for its third-straight positive week.

Linda Duessel, senior equity strategist at Federated Hermes, said investors who want to move into small caps should look for those companies with strong growth profiles and profits.

"They're very inexpensive historically, and particularly those that make money. … You've got to buy the ones that are profitable," Duessel said.

"Ideally, what you want are the companies that are small that are doing so well, that are growing enough, that they're going to be assigned the mid-cap status next," she added.

There are some hints that it is the more financially stable small caps leading this rebound. Among exchange-traded funds, small-cap value funds are outperforming the broader Russell 2000.

— Jesse Pound

Ford headed for worst week since March 2020

Shares of Ford were marginally higher in morning trading, putting the stock on pace for its worst weekly performance in more than four years.

The stock has fallen around 20% this week. If it closes around this level on Friday, it will mark its worst since the week that ended March 20, when it plunged more than 22%.

Ford closed Thursday's session down 18.4% after the automaker posted weaker-than-expected earnings after the bell Wednesday. This was the stock's worst daily decline since 2008.

— Sean Conlon

More than 40% of S&P 500 has reported earnings this season

Most companies reporting earnings so far this season have exceeded Wall Street's expectations.

More than 40% of S&P 500-listed companies have posted their quarterly financial results, according to FactSet data as of Friday morning. Of those, more than 78% have beaten analysts' consensus forecasts.

There are several key names reporting next week as earnings season continues. This list includes several megacap technology stocks such as Microsoft, Meta, Amazon and Apple. McDonald's and Boeing are also slated to post results during the week.

— Alex Harring, Robert Hum

Russell 2000 on track for 3-week winning streak

The rotation out of the megacap tech titans and into their smaller-size counterparts continued this week.

This week, the Russell 2000 small-cap index is on pace for a 3.3% gain. On the other hand, the Dow Jones Industrial Average is slated to advance just 0.4%, while the S&P 500 and Nasdaq Composite could respectively end the week 1.2% and 2.6% lower.

If the Russell 2000 does indeed end higher, it would mark the index's first three-week win streak since a four-week streak that ended in May.

— Lisa Kailai Han

University of Michigan survey shows lower inflation outlook

Consumers' optimism dimmed slightly in July, but the outlook for inflation dipped to a tie for its lowest in more than three and a half years, according to the final University of Michigan Survey of Consumers released Friday.

The overall sentiment index edged lower to 66.4, better than the Dow Jones estimate for 66, but below the June reading of 68.2.

On inflation, the revised one-year outlook showed the expectation for 2.9%, tying several months for the lowest since December 2020. The five-year outlook was at 3%, where it has held for the past four months.

— Jeff Cox

3M leads Dow's more than 500-point gain

The Dow Jones Industrial Average popped 500 points, or 1.2%, led to the upside by 3M.

The industrial giant popped 14% on stronger-than-expected second-quarter earnings. UnitedHealth, Visa, Merck and Home Depot added about 2% each.

Five stocks were negative in early-morning trading. Dow was the biggest laggard, inching down 0.6%.

— Samantha Subin

Stocks open higher Friday

Stocks opened higher Friday to cap off a volatile week of trading.

The Dow Jones Industrial Average popped 280 points, or 0.7%. The S&P 500 gained 0.6%, while the Nasdaq Composite jumped 0.8%.

— Samantha Subin

Thursday's 'big loser' was the momentum factor, Wolfe Research says

Thursday's losses in the S&P 500 and Nasdaq Composite continued to show a waning in the momentum factor, or the idea that stocks that have outperformed will continue to do so in the near future, according to Wolfe Research.

"While small caps continued to shine, the big loser on the day was the momentum factor," Wolfe Research's Rob Ginsberg wrote Thursday. "Following a brief and lackluster oversold bounce, momentum reversed hard today to close below support as the top we've been discussing continues to resolve lower."

— Sarah Min

Fed's preferred inflation gauge matches expectations

The personal consumption expenditures price index rose 0.1% month over month and 2.5% from a year ago in June, matching estimates from economists polled by Dow Jones. Core inflation, which excludes food and energy, gained 0.2% for the month and 2.6% on the year, also in line with expectations.

— Fred Imbert

Stocks making the biggest moves before the bell: Coursera, WW International and more

These are the stocks moving the most in premarket trading:

• Coursera — The online course provider stock surged 26% after Coursera posted second-quarter revenue of $170 million, which exceeded the $164 million analysts had expected, according to LSEG.
• WW International — The Weight Watchers parent lost 5.3% on the back of a Morgan Stanley downgrade to equal weight from overweight.
• Dexcom — The medical device stock plummeted more than 36% after the company posted a second-quarter revenue miss.

Read the full list of stocks moving here.

— Lisa Kailai Han

Historic small-cap rally has lasting power, according to Principal Asset Management

The current strength of the small-cap sector is a "significant rotation not seen in decades," according to George Maris, chief investment officer and global head of equities at Principal Asset Management.

Small caps have only managed to outperform large caps twice over the past 30 years — during the Covid-19 pandemic and during the dot-com bubble in 1999 to 2000, per Maris.

"Those are historical levels, and we are currently at such a point, so this rotation has staying power because everyone's offside," Maris said.

Broadening earnings will lead to more optimism around the small-cap sector, the investor added. Looking ahead, earnings growth stemming from interest rate cuts will help small businesses, noted Maris.

"The market, outside of the Mag 7, looks relatively normal long-term and in fact in small cap looks pretty interesting. … There's a very optimistic case for going long on small caps," Maris said.

The Russell 2000 is up 1.8% week to date and roughly 8.6% in July.

— Hakyung Kim

Communication services sector heads for worst week since October 2023

The communication services sector is on track for its worst week since October 2023 as investors flee tech giants.

The sector's weekly losses have totaled 4.63% as of Thursday's close. Alphabet shares are among the notable losers, off 5.8% week to date, while Meta Platforms has dropped 4.9%.

The information technology sector is also limping into Friday, toting a 3.5% decline for the week. A 16.7% slide in CrowdStrike this week and a 4.8% tumble in Nvidia contributed to the sector's losses.

Health care and utilities, traditionally deemed defensive plays, are the only two sectors in the S&P 500 that are positive for the week, up 0.77% and 0.48%, respectively.

— Darla Mercado, Chris Hayes

Steve Eisman calls recent pullback a psychological rotation

Steve Eisman of "The Big Short" fame believes the recent tech-led market pullback is driven by emotions instead of a fundamental deterioration.

"Rotations are always violent. They always catch everybody unaware. And it's not a fundamental correction. It's like a psychological rotation," Eisman said on CNBC's "Fast Money."

The senior portfolio manager at Neuberger Berman said there has not been anything alarming about the economy overall.

"I don't think fundamentals have really changed all that much," he said. "The only negative data point I would point to is that consumer spending seems to have slowed a little bit on the margin, and delinquencies are up a touch."

— Yun Li

Dexcom, Coursera among stocks making biggest moves after hours

Check out the companies making headlines in after-hours trading:

• Dexcom — Shares of the medical device company plunged more than 35%. Dexcom's fiscal full-year revenue guidance of $4 billion to $4.05 billion marked a reduction from the outlook it shared earlier in the year. Revenue in the second quarter missed analysts' expectations, coming in at $1 billion versus consensus estimates of $1.04 billion, per LSEG. Insulet shares slipped 9.1% in sympathy.
• Boston Beer Company — The maker of Twisted Tea and Samuel Adams slid 5% after second-quarter results missed the Street's estimates. Boston Beer posted earnings of $4.39 per share on revenue of $579 million, while analysts sought $5.02 per share in earnings and $597 million in revenue, per LSEG.
• Coursera — Shares of the online course provider surged 16%. Second-quarter revenue came in at $170 million, surpassing analysts' estimates for $164 million, per LSEG. Coursera posted a loss of 15 cents per share, while the Street called for earnings of 1 cent per share.

For the full list, read here.

— Pia Singh

Stock futures open higher on Thursday

Stock futures were higher shortly after 6 p.m. ET.

Futures tied to the Dow Jones Industrial Average added 64 points, or 0.16%. S&P futures and Nasdaq 100 futures each gained 0.1%.

— Pia Singh