Wall Street ended the first day of the third quarter with a strong bounce

NEW YORK (Reuters) – Wall Street bounced back to a sharply higher closing level in light trading on Friday as investors kicked off the second half of the year ahead of the long weekend.

All three US stock indexes reversed early losses to end in positive territory following the worst first half of the stock market in decades.

However, all three indices posted losses this week.

“We’re heading into the weekend and having a relief rally late in the day,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “But we’ll probably have to wait until investors come back from the weekend to see if that’s sustainable at the start of the new quarter.”

Market participants are now looking at the second-quarter earnings season, the Labor Department’s June employment report, and the Federal Reserve’s monetary policy meeting expected later in July.

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Micron shares fell 2.9%, pushing the Philadelphia Semiconductor Index (.sox) down 3.8%.

Concerns about declining demand in the face of decades of high inflation were reflected in the Institute for Supply Management’s (ISM) Purchasing Managers’ Index, which showed a slowdown in the prices of new orders inputs.

The ISM report appears to support the view that the economy is cooling and inflation appears to have passed its peak. This raised the possibility that the Fed will have room to maneuver in a peaceful direction after the second consecutive rate hike of 75 basis points expected in July.

“The Fed will need to see more evidence to change its mind about continued rate hikes,” said Tim Gresky, senior portfolio strategist at Ingalls & Snyder in New York. “There is still a lot of uncertainty about the economy and inflation despite early signs that inflation may have peaked.”

Dow Jones Industrial Average (.DJI) It rose 321.83 points, or 1.05%, to 31,097.26, the Standard & Poor’s 500 . (.SPX) It rose 39.95 points, or 1.06%, to 3,825.33 points, and the Nasdaq Composite (nineteenth) It added 99.11 points, or 0.90%, to 11,127.85 points.

All 11 major sectors of the S&P 500 ended the session in green, with utilities (.SPLRCU) Enjoy the highest profit rate.

The second-quarter reporting season begins in several weeks, and 130 companies in the S&P 500 have announced previously. Of those, 45 were positive and 77 were negative, a weaker negative/positive ratio than it was a year ago, according to Refinitiv data.

The possibility of profit margins taking a hit from harmful inflation and dwindling consumer demand will make market participants listen closely to forward guidance.

Analysts now expect S&P 500 total earnings for the second quarter to grow 5.6%, down from the 6.8% forecast at the start of the quarter, according to Refinitiv.

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Advance issues outnumbered declining issues on the New York Stock Exchange by 2.77 to 1; On the Nasdaq, the 1.57 to 1 ratio favored the highs.

S&P 500 hits new 52-week high and 48 new low; The Nasdaq Composite recorded 12 new highs and 219 new lows.

Volume on US stock exchanges was 11.01 billion shares compared to an average of 12.88 billion over the last 20 trading days.

Stephen Kolb reports. Additional reporting by Amruta Khandekar and Sruthi Shankar in Bengaluru. Editing by David Gregorio

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