NEW YORK (AP) — U.S. stocks were on track Friday to end a recent bullish week, while Nvidia Inc.’s shares continued to cool off from their stunning supernova burst.
The S&P 500 fell 0.2%, but remained near the all-time high it hit on Tuesday and has risen for eight of the past nine weeks. The Dow Jones Industrial Average rose 15 points, or less than 0.1%, while the Nasdaq Composite Index was down 0.2%.
Nvidia Inc. again dragged down the market, dropping 3.2%. The company’s shares have soared more than 1,000% since October 2022 on frenzied demand for its chips that underpin much of the world’s move toward artificial intelligence technology, briefly overtaking Microsoft this week to become Wall Street’s most valuable company.
But nothing goes up forever, and Nvidia shares have fallen over the past two days, marking their first losing week in the past nine weeks.
Most of the rest of Wall Street was relatively quiet, with a few exceptions.
Sarepta Therapeutics shares rose 30.1% after U.S. regulators approved the company’s drug for use in children ages 4 and older with Duchenne muscular dystrophy.
Gun maker Smith & Wesson Brands Inc.’s shares fell 12.9% even though the company reported profits for its latest quarter that beat analysts’ expectations. Chief Executive Mark Smith said summer is traditionally a slow season for firearms sales.
Trump Media & Technology Group Inc. shares recovered from early losses to rise 3.4%, paring the weekly loss to 25.3%. Shares of the company behind Donald Trump’s Truth social platform had nearly halved since he was convicted in late May for paying hush money to a porn star who allegedly had sex with them in an attempt to illegally influence the 2016 presidential election.
Overall, the S&P 500 fell 8.55 points to 5,464.62, the Dow Jones Industrial Average rose 15.57 points to 39,150.33 and the Nasdaq Composite index lost 32.23 points to 17,689.36.
In bond markets, U.S. Treasury yields initially fell after reports showed economic activity in euro zone countries was weaker than economists had expected. In continental Europe, worries are already building ahead of French elections that could further destabilize financial markets.
The weak business activity report pushed down European yields and initially weighed on U.S. Treasury yields, which recovered much of their losses after a separate report late in the morning said U.S. business activity may be stronger than expected.
A preliminary survey of U.S. manufacturing and service activity released by S&P Global showed that aggregate production growth hit its highest level in 26 months. Perhaps more importantly for Wall Street, the strength is likely occurring without any rising inflationary pressures.
“Historical comparisons suggest that this decline brings the survey’s price index in line with the Fed’s 2% inflation target,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.
The Federal Reserve is in a precarious position, trying to slow the economy with high interest rates enough to bring high inflation down to 2%. The key is to lower interest rates at the right time. Wait too long and the economic slowdown could turn into a recession. Lower it too soon and inflation could re-accelerate.
Hope remains rife among traders that the Fed can get it done, with many predicting at least two rate cuts later this year, according to data from CME Group. Of course, those predictions have proven overly optimistic many times throughout history.
Fed officials expect to cut their key interest rate, which is at its highest in more than two decades, once or twice in 2024. The economy is still growing but has slowed recently under the weight of high interest rates. Housing and manufacturing have been particularly hard hit, and low-income households are still struggling to keep up with rising prices.
The yield on the 10-year Treasury note fell slightly to 4.25% from Thursday’s close of 4.26%. The yield on the two-year note, which better reflects expectations for Fed policy action, fell to 4.73% from 4.74%.
Overseas, European stocks fell on weak European economic data, and many Asian indexes also fell. Hong Kong’s Hang Seng Index fell 1.7% and South Korea’s KOSPI dropped 0.8%.
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AP Business Writers Yuri Kageyama and Alex Veiga contributed.
