Stocks pare losses for the week as volatility plunges.
US stocks extended their relief rally on Friday, stoked by rising oil prices and improving risk sentiment in the wake of the biggest selloff of the year.
The large-cap S&P 500 Index (NYSEARCA:SPY) climbed 0.7% to finish at 2,381.73, with all 11 sectors reporting gains.
Commodity-sensitive shares were dragged higher by rising oil prices after US crude futures crossed $50 a barrel for the first time in a month. Shares of energy and materials companies climbed at least 1.1%.
The Dow Jones Industrial Average (NYSEARCA:DIA) rose 0.7% to 20,804.84, with all but a few of its blue-chip companies reporting gains.
The technology-driven Nasdaq Composite Index (NYSEARCA:QQQ) advanced 0.5% to settle at 6,083.70.
A measure of implied volatility in US equities declined for a second consecutive day, a sign investors were looking past the recent political drama in Washington .The Chicago Board Options Exchange (CBOE) Volatility Index (NYSEARCA:VXX) plunged 17.9% to 12.04, on a scale of 1-100 where 20 represents the historic mean.
The so-called “fear index” spiked more than 46% Wednesday on route to its biggest gain of the year.
In commodities, US West Texas Intermediate (WTI) crude rose $1.02 or 2.1%, to $50.37 a barrel on the New York Mercantile Exchange. Brent crude, the international futures benchmark, added $1.16, or 2.2%, to $53.67 a barrel.
Crude prices held higher even after Baker Hughes said the number of active oil rigs operating on US soil rose for an eighteenth consecutive week. The active rig count climbed by eight to 720, the energy firm said.
The Final Word: The latest relief rally suggests investors are still optimistic about President Trump’s pro-growth policies. However, political risks are expected to become the norm as the president navigates through a tumultuous first term.