Wall Street closed its 10th winning week in the last 11 with a mixed finish on Friday, as the S&P 500 edged up by 0.1 percent and the Dow Jones Industrial Average fell 0.3 percent. The Nasdaq was relatively unchanged, rising less than 0.1 percent.
The mixed finish follows the release of an encouraging report on inflation, which has been a key focus for investors. The data showed that inflation at the U.S. wholesale level was weaker last month than economists had expected. This has further bolstered hopes that the Federal Reserve will cut interest rates multiple times this year.
The easing of inflationary pressures has already led to a decline in Treasury yields, with the 10-year Treasury yield now at 3.94 percent. This is a significant drop from its previous level of nearly 4 percent and a substantial decrease from its peak in October 2023 when it reached above 5 percent.
Traders are now betting on the Federal Reserve beginning to cut interest rates as early as March, with expectations of multiple rate cuts by 2024. However, the Fed has cautioned that it may raise rates further if inflation fails to reach its target of 2 percent.
The performance of the stock market is closely tied to both interest rates and company profitability. Investors are anticipating a second consecutive quarter of growth for the S&P 500 after it struggled earlier in the year due to high inflation.
Earnings reporting season kicked off with mixed results from Delta Air Lines, JPMorgan Chase, and others. While Delta Air Lines reported stronger profits and revenue for the final three months of 2023 than analysts had forecast, its stock still fell 9 percent. UnitedHealth Group also saw a sharp decline in its stock price, falling 3.4 percent, despite beating profit forecasts.
The rise in oil prices has also impacted the market, particularly for travel-related companies. United Airlines fell by 10.6 percent, while Norwegian Cruise Line Holdings lost 4.3 percent. The increase in crude prices was driven by concerns over potential disruptions to supplies following strikes against Yemen’s Houthi rebels by the U.S. and U.K.
Overall, the S&P 500 closed slightly higher, gaining 3.59 points to reach 4,783.83. The Dow Jones Industrial Average fell 118.04 points to 37,592.98, and the Nasdaq composite increased by 2.57 points to 14,972.76.
In global markets, the Nikkei 225 in Japan had a strong week, experiencing a 1.5 percent jump and reaching levels not seen since 1990. Meanwhile, indexes in much of the rest of Asia were lower, while Europe saw higher indexes.
Investors will continue to closely monitor inflation data and earnings reports to determine the direction of the market and the likelihood of interest rate cuts by the Federal Reserve.
Please note: This article has been generated using AI language model. The content generated may not be wholly accurate and should not be used for any purpose without extensive fact-checking.
