Traders work on the floor of the New York Stock Exchange on June 18, 2024.
Spencer Pratt | Getty Images News | Getty Images
U.S. stocks edged lower on Friday as traders digested the latest economic data that showed inflation slowing and better-than-expected consumer sentiment figures. They also concluded the first half of 2024 was a strong one.
of S&P 500 It closed down 0.41% at 5,460.48. Nasdaq Composite Index It ended down 0.71% at 17,732.60. Both averages retreated after hitting new intraday highs earlier in the session. Dow Jones Industrial Average It fell 45.20 points, or 0.12 percent, to close at 39,118.86.
The Commerce Department reported Friday that inflation slowed to its lowest level in more than three years in May. The core PCE price index, which excludes volatile food and energy prices, rose just 0.1% last month and 2.6% from a year ago. Both estimates were in line with Dow Jones consensus forecasts. The core PCE index is the Federal Reserve’s preferred inflation measure. Headline PCE, which includes food and energy, was flat month-over-month and up 2.6% from a year ago, also in line with expectations.
“From a market perspective, today’s PCE report was near perfect,” said David Donabedian, chief investment officer at CIBC Private Wealth U.S. “This was an undeniably positive report.”
The University of Michigan’s June consumer confidence index beat expectations, rising to 68.2 from a preliminary reading of 65.6. The one-year inflation outlook fell to 3% from the 3.3% forecast in May.
The inflation data is considered the most important for market participants trying to guess when the Fed will start cutting interest rates. Traders currently rate the probability that the Fed will cut rates at its September meeting at 64.1%, according to CME Group’s FedWatch tool.
The market officially completed the first six months of 2024 with the close of trading on Friday.
Performance of the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite in 2024
The tech-heavy Nasdaq led the way, climbing 18.1% in the first half as the artificial intelligence boom captured investor excitement. The S&P 500 rose 14.5%, while the blue-chip Dow only added 3.8%. NVIDIA The stock was down 0.4% on Friday.
“The AI ​​theme has been in the spotlight throughout the year, accelerating concentration across the market,” said Mike Dixon, head of research and quantitative strategy at Horizon Investments. “The result has been a very strong year.”
Part of the Dow’s weakness can be attributed to an unusual decline in the second quarter: It fell 1.7% in the second quarter, while the S&P 500 and Nasdaq rose 3.9% and 8.3%, respectively, during the same period.
All three stocks rose in June, their seventh straight month of gains in the past eight months. The Nasdaq led the way again this month, up nearly 6% since the start of the month. The S&P 500 and Dow are up 3.5% and 1.1%, respectively.
So far this week, the Nasdaq is up 0.2%, while the S&P 500 and Dow are down slightly, less than 0.1%.
“The stock market has had a resilient first half of the year,” said John Luke Tyner, portfolio manager at Aptus Capital Advisors.
Tyner believes the market needs more participation to surpass its all-time high later this year, noting that events such as an election, the timing of interest rate cuts and signs of weakening consumer demand could weigh on the market.
“If all of these things come to fruition, we may see more volatility,” Tyner said. “Overall, everybody has enjoyed the last 10 months of the market because it’s been easy. [but] At some point, complacency will have to end.”
Nike Shares fell nearly 20% after the sporting goods retailer cut its full-year earnings outlook. Foot Locker The stock fell more than 2% in sympathy.
