Stocks displayed indecision throughout Friday's trading session, as initial upward momentum could not be maintained. The major indices fluctuated around the baseline, ultimately ending with slight deviations.
The Dow Jones Industrial Average fell by 86.06 points, or 0.2%, to close at 43,828.06, marking its seventh consecutive day in decline. Similarly, the S&P 500 marginally decreased by 0.16 points, less than a tenth of a percent, to 6,051.09. The Nasdaq Composite, known for its tech focus, edged higher by 23.88 points, or 0.1%, concluding at 19,926.72.
For the week, the indices also showed a mixed picture: the Nasdaq advanced by 0.3%, contrasted by the S&P 500's 0.6% decline and the Dow's sharper 1.8% drop.
The early market optimism was partially driven by Broadcom’s (AVGO) strong earnings report, which resulted in a 24.4% surge in the company's shares. Broadcom's fiscal fourth-quarter performance exceeded expectations, and the company projected robust demand for its custom AI chips to continue.
However, enthusiasm was tempered as investors anticipated the upcoming Federal Reserve's meeting. It is broadly expected that the Fed will reduce interest rates by another 25 basis points. Traders will focus keenly on the accompanying commentary for future rate cut signals.
Persistently high inflation figures have stirred concerns that the Fed might adopt a slower pace in reducing rates next year than previously forecasted. According to CME Group’s FedWatch Tool, there is a 97.1% probability of a quarter-point rate cut next week, yet an 81.0% likelihood that rates will remain unchanged in late January.
In terms of inflation, the Labor Department indicated an unexpected rise in U.S. import prices for November.
**Sector Analysis**
Gold stocks witnessed extended losses amid continued depreciation of the precious metal, pulling the NYSE Arca Gold Bugs Index down by 2.7%. Steel stocks also experienced significant declines, with the NYSE Arca Steel Index plummeting by 2.6%, reaching its lowest closing point in nearly three months. Additionally, sectors such as computer hardware, airlines, and housing exhibited marked weaknesses, while semiconductor and networking stocks demonstrated resilient gains.
**Global Markets**
Internationally, the Asia-Pacific stock markets primarily experienced declines on Friday. Japan's Nikkei 225 Index fell by 1.0%, with China’s Shanghai Composite Index dropping 2.0%.
In Europe, the major markets registered moderate downward movement. The French CAC 40 Index decreased by 0.2%, while the FTSE 100 Index in the U.K. and Germany's DAX Index both reduced by 0.1%.
In the bond market, treasuries continued their downward trend, resulting in the yield on the benchmark ten-year note rising by 7.5 basis points to settle at 4.399%.
**Outlook for the Week Ahead**
Next week, the Federal Reserve's monetary policy decision will take center stage. Market participants will also closely monitor reports on retail sales, industrial production, housing starts, existing home sales, and personal income and spending. The report on personal income and spending, due next Friday, is particularly significant as it includes the Fed's favored measures of consumer price inflation.
The material has been provided by InstaForex Company -
www.instaforex.com
