US equities climb firmly higher

US equities strengthened on Friday as recent data has eased concerns about the economic outlook while also increasing confidence the Federal Reserve will cut interest rates next month. The Dow climbed 96.70 points or 0.2 percent to 40,659.76, the Nasdaq rose 37.22 points or 0.2 percent to 17,631.72 and the S&P 500 edged up 11.03 points or 0.2 percent to 5,554.25. For the week, the Nasdaq soared by 5.3 percent, the S&P 500 spiked by 3.9 percent and the Dow surged by 2.9 percent.

In U.S. economic news, preliminary data released by the University of Michigan showed consumer sentiment in the U.S. has improved by more than expected in the month of August. The University of Michigan said its consumer sentiment index rose to 67.8 in August after falling to 66.4 in July. The consumer sentiment index regained ground after hitting its lowest level since November 2023 in the previous month. Meanwhile, the Commerce Department released a report showing a sharp pullback by new residential construction in the month of July. The report said housing starts plunged by 6.8 percent to an annual rate of 1.238 million in July after jumping by 1.1 percent to a revised rate of 1.329 million in June. The Commerce Department said building permits also plummeted by 7.0 percent to an annual rate of 1.396 million in July after surging by 3.9 percent to a revised rate of 1.454 million in June.

In the bond market, treasuries regained ground following the sharp pullback seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.4 basis points to 3.892 percent. The dollar index held around 102.4 on Monday after losing about 0.6% in the previous session, weighed down by expectations that the Federal Reserve will have to lower borrowing costs soon to avert an economic downturn.

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