Highlights
Equities sagged Friday after mixed earnings news and US debt ceiling talks appeared to stall. The Dow industrials eased 0.3 percent, the S&P 500 slipped 0.1 percent, and the Nasdaq was down 0.2 percent. US Treasury yields and the dollar rose. Oil prices fell on the day but ended higher on the week.
Republican congressional leaders walked out of the debt limit talks at midday after the discussions evidently reached an impasse. It was unclear when the negotiations would resume but the development contrasted with much more optimistic claims from leaders on both sides over the past few days about prospects for a near-term deal.
Somewhat more positive for the market were comments from Federal Reserve Chair Jerome Powell, who came across somewhat less hawkishly than his colleagues so far this week. After Powell spoke, markets were somewhat less inclined to expect another rate hike from the Fed in June.
Banks, regional bank stocks in particular, had a bad day after Treasury Secretary Janet Yellen was quoted as saying that more regional bank mergers may be needed in the current environment. That distressed investors who have been hoping recent bank troubles are ending.
Retail stocks lagged after Foot Locker dropped on a big earnings miss and gloomy guidance. Consumer stocks suffered generally, including restaurants, travel & leisure, and streaming media.
On the positive side, energy outperformed as oil ended the week higher. Precious metals, pharma, tobacco, and computer hardware outperformed too.
Republican congressional leaders walked out of the debt limit talks at midday after the discussions evidently reached an impasse. It was unclear when the negotiations would resume but the development contrasted with much more optimistic claims from leaders on both sides over the past few days about prospects for a near-term deal.
Somewhat more positive for the market were comments from Federal Reserve Chair Jerome Powell, who came across somewhat less hawkishly than his colleagues so far this week. After Powell spoke, markets were somewhat less inclined to expect another rate hike from the Fed in June.
Banks, regional bank stocks in particular, had a bad day after Treasury Secretary Janet Yellen was quoted as saying that more regional bank mergers may be needed in the current environment. That distressed investors who have been hoping recent bank troubles are ending.
Retail stocks lagged after Foot Locker dropped on a big earnings miss and gloomy guidance. Consumer stocks suffered generally, including restaurants, travel & leisure, and streaming media.
On the positive side, energy outperformed as oil ended the week higher. Precious metals, pharma, tobacco, and computer hardware outperformed too.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
