Stocks rallied on Friday after a report showed that US consumer sentiment fell to its lowest level in nearly a decade. Such provoked the S&P 500 to hit another record and close 12% higher, trading at around 4.470 points. Apparently, both the consumer goods and real estate sectors showed gains, while energy and financial sectors declined. All in all, the index has nearly doubled since March 2020, with the largest growth in the energy sector.
Shares of Walt Disney also surged after its streaming subscriptions topped valuations. At the same time, European stocks posted the longest winning streak since 1999.
Matt Mayley, chief market strategist at Miller Tabak, explained the movement and said: "Most of the reporting season is behind us, so people are just catching their breath after a good rally."
In addition, the University of Michigan reported that preliminary sentiment fell 11 points to 70.2, which is the lowest level since December 2011.
This deterioration underscores how rising prices and concerns about the potential economic impact of the Delta virus are weighing on US citizens. And falling confidence could lead to a more marked slowdown in economic growth in the coming months, especially if consumers limit their spending.
The weakening rally in the energy sector also raised concerns, more specifically when the sector ended its 19-day streak on Tuesday, as the International Energy Agency cut its forecasts for oil demand for the rest of the year, while Goldman Sachs predicted only a short-term decline in consumption.
