US stock markets staged a powerful comeback on Friday, driven by a significant rebound in heavyweight technology stocks. The rally helped major indices recover from a mid-week slump, though the session was marred by a dramatic sell-off in sportswear giant Nike following disappointing results from a key market.
Tech Stocks Fuel Market Recovery
The S&P 500 index climbed 0.8% to close at 5,464.62, while the technology-focused Nasdaq Composite jumped an impressive 1.1% to finish at 17,689.36. The Dow Jones Industrial Average also ended in positive territory, gaining 0.2% to settle at 39,150.33. This upward move was largely powered by a resurgence in mega-cap tech names, which regained their footing after recent volatility. Market sentiment was cautiously optimistic as investors digested mixed signals on the economic front and the Federal Reserve's monetary policy path.
Nike's China Woes Trigger Historic Stock Plunge
In a stark contrast to the broader market euphoria, Nike Inc. faced a brutal trading day. The company's shares tumbled a staggering 12%, marking its worst single-day decline in over two decades. This dramatic fall came after the athletic apparel behemoth reported a sobering forecast. Nike anticipates its revenue for the current fiscal year to decline by approximately 10%, a sharp reversal from prior expectations of growth. The primary culprit identified was persistent weakness in its Greater China market, a critical region for global sales growth.
Nike's management outlined a new strategy to navigate these challenges, which includes a significant cost-cutting plan aimed at slashing up to $2 billion over the next three years. The company also signaled a shift in its product pipeline, promising accelerated innovation to reignite consumer demand. However, these measures failed to reassure investors, who were spooked by the scale of the slowdown in a market long considered Nike's growth engine.
Broader Market Context and Fed Policy
The trading week was characterized by heightened sensitivity to economic data and central bank commentary. Earlier volatility was partly attributed to remarks from Federal Reserve officials, including Neel Kashkari, President of the Minneapolis Fed. He suggested that it could take a year or two for inflation to sustainably return to the Fed's 2% target, tempering expectations for aggressive interest rate cuts in the near term. This perspective reinforced a "higher-for-longer" rate narrative that has periodically unsettled markets.
Despite Nike's dramatic drop, the overall market breadth was positive. The advance-decline ratio on the New York Stock Exchange favored gaining stocks, indicating broad participation in the rally beyond just the tech sector. As markets head into the final stretch of the first half of the year, investor focus remains squarely on corporate earnings resilience, inflation trends, and the evolving timeline for monetary policy easing by the Federal Reserve.
