Highlights
Equities ended mixed Friday with strength in selected megacaps providing support, offset by broad weakness elsewhere. The Dow Jones industrial average slipped 0.2 percent, the S&P 500 eased 0.1 percent, and the Nasdaq was up 0.1 percent. Bond yields, oil prices and the dollar all declined.
Europe's stock selloff, fueled by worries over French political stability, gave investors an excuse to push most stocks lower in the morning. Stocks faced consolidative pressure after the major indexes set record highs this week after supportive inflation reports. On the other hand, the hopeful frenzy around artificial intelligence continued to fuel demand for stocks linked to AI, especially chipmakers like Nvidia and Broadcom.
Cooler than expected consumer price and producer price reports this week renewed hopes for rate cuts, along with mixed but mostly weaker economic reports that have bolstered expectations for the wished-for soft landing. Less supportive were somewhat hawkish noises from the Federal Reserve policy announcement and subsequent comments, plus last week's blowout employment report.
On Friday, Cleveland Fed President Loretta Mester said recent inflation trends are helpful but the Fed is far from comfortable about the inflation picture. And Chicago Fed President Austan Goolsbee welcomed the latest CPI report but suggested officials would need to see a lot of months of similar results before they can cut rates.
Among sectors Friday, best were technology and communications services. Lagging were energy, materials, industrials, financials and consumer discretionary.
Europe's stock selloff, fueled by worries over French political stability, gave investors an excuse to push most stocks lower in the morning. Stocks faced consolidative pressure after the major indexes set record highs this week after supportive inflation reports. On the other hand, the hopeful frenzy around artificial intelligence continued to fuel demand for stocks linked to AI, especially chipmakers like Nvidia and Broadcom.
Cooler than expected consumer price and producer price reports this week renewed hopes for rate cuts, along with mixed but mostly weaker economic reports that have bolstered expectations for the wished-for soft landing. Less supportive were somewhat hawkish noises from the Federal Reserve policy announcement and subsequent comments, plus last week's blowout employment report.
On Friday, Cleveland Fed President Loretta Mester said recent inflation trends are helpful but the Fed is far from comfortable about the inflation picture. And Chicago Fed President Austan Goolsbee welcomed the latest CPI report but suggested officials would need to see a lot of months of similar results before they can cut rates.
Among sectors Friday, best were technology and communications services. Lagging were energy, materials, industrials, financials and consumer discretionary.
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.
