- U.S. stocks rose on Friday, attempting to recover from two days of selling.
- The Dow Jones Industrial Average came under its worst selling pressure in a year on Thursday due to inflation concerns following the Federal Reserve minutes and positive economic data.
- Investors are awaiting PCE data next week to determine whether inflation is declining.
U.S. stocks edged higher on Friday as investors looked for a rebound after two days of market declines.
The Dow Jones Industrial Average fell for its biggest drop in more than a year on Thursday, despite a surge in Nvidia shares after the company reported strong first-quarter earnings.
“NVDA’s failure to bolster the market highlights that even the strongest companies in the S&P 500 can’t stand up to the Fed,” said Quincy Krosby, chief global strategist at LPL Financial.
Inflation fears sparked a two-day sell-off, with Fed minutes released on Wednesday highlighting lingering concerns among Fed officials that they may be cutting interest rates too soon. Those fears were proven correct on Thursday, when PMI data showed a still-strong economy and signs of rising prices.
According to CME’s FedWatch tool, the possibility of a Fed rate cut has been postponed until the November FOMC meeting, rather than the first cut coming in September.
Investors will be focusing on PCE data next week to gauge whether inflation is trending lower.
“The PCE report due next Friday could clearly be a positive catalyst for markets if the data is weaker than expected. If not, markets may be content that inflation remains somewhat contained even if PCE remains stable, but yesterday’s market actions suggest that investors and traders alike are losing patience with the Fed’s inability to contain ever-rising prices,” Crosby said.
Below are U.S. stock indexes as of the start of trading at 9:30 a.m. on Friday.
What else is happening today:
Commodities, Bonds and Cryptocurrencies:
- West Texas Intermediate crude rose 0.27% to $77.08 a barrel, while the international benchmark Brent crude rose 0.06% to $81.41 a barrel.
- Gold rose 0.24% to $2,342.80 per ounce.
- The yield on the 10-year Treasury note rose 1 basis point to 4.49%.
- Bitcoin fell 0.92% to $67,323.
