Stocks slipped on Friday as Wall Street closed out a huge week in which investors received a pause on rate hikes from the Federal Reserve, plus encouraging inflation data.
The S&P 500 ticked down 0.37% to close at 4,409.59, while the Dow Jones Industrial Average slipped 108.94 points, or 0.32%, to close at 34,299.12. The Nasdaq Composite lost 0.68% to finish the session at 13,689.57.
Here are the major market milestones on the week:
- The S&P 500 is up 2.6% on the week, its best performance since March.
- It's the S&P 500's fifth positive week in a row, the first such streak since November 2021.
- The benchmark is now up more than 26% from its bear market low.
- The Nasdaq Composite is up about 3.3% on the week, its best week since March.
- The Nasdaq is up eight weeks in a row, its best winning streak since 2019.
- Both the Nasdaq and S&P 500 were up six days in a row through Thursday.
- The Dow Jones Industrial Average was up nearly 1.3% for the week, its third positive week in a row.
- The S&P 500 and Nasdaq have hit their highest levels since April 2022.
The Federal Reserve delivered what investors wanted this week when the central bank left rates unchanged Wednesday after 10 consecutive hikes. While the Fed signaled that two more rate increases were coming this year, many traders and economists on Wall Street believe the Fed could be nearly done. Earlier in the week, the May consumer price index came in at the lowest in two years.
Adobe added 0.9% after beating results and issuing upbeat guidance, the latest tech stock to rally. AI darling Nvidia gained 10% this week, adding to its 192% surge this year. Microsoft added 4.7% this week and hit a record Thursday. Tech shares were the hardest hit initially when the Fed embarked on its rate-hiking campaign.
"Wall Street remains upbeat that the AI wave won't be going away anytime soon and that investors will prefer US stocks as we see diverging central bank policies worldwide," said Ed Moya, senior market analyst at Oanda. "This stock market rally seems a bit overextended but too much money remains on the sidelines, which means if the AI trade remains intact, this winning streak for the S&P 500 can continue."
Friday brought more good news on the inflation and economic front. Consumer inflation expectations fell in June, with one-year assumptions for price pressures declining to 3.3% from 4.2% in May. The headline reading from the University of Michigan Survey of Consumers came in at 63.9, higher than estimates of 60.2 from Dow Jones.
Friday's session saw choppy moves across the stock market as stock options, index futures and index future option contracts.
Friday also marks the final trading day before a long weekend, with the market closed Monday in observation of Juneteenth.
Stocks close lower, S&P 500 clings to best week since March
Stocks closed lower on Friday, with the S&P 500 notching its best week since March.
The 30-stock Dow Jones Industrial Average fell 108.94 points, or 0.3%, to close at 34,299.12. The tech-heavy Nasdaq Composite slipped 0.7% to finish the session at 13,689.57, while the S&P 500 fell 0.4% to close at 4,409.59. The S&P 500 and Nasdaq Composite's Friday fall broke their six-session winning streaks.
— Brian Evans
Morgan Stanley says Nvidia is the top AI pick over AMD
Morgan Stanley switched its top pick to Nvidia from Advanced Micro Devices and hiked its price target, saying the former has more immediate upside than other AI stock plays.
"Making NVDA our top pick, reflecting significant potential for near term upside — as the only company likely beating and raising due to AI in CY23," Joseph Moore wrote Friday.
"AMD has been our top pick, and we continue to be bullish on their 2024 AI opportunity; but the top pick designation is meant to highlight near term upside, which is a bigger factor for NVIDIA. As a result, we remain OW both stocks, but are shifting to NVDA for our top pick," he added.
— Sarah Min
NYSE decliners lead advancers Friday
Roughly 1,600 stocks at the New York Stock Exchange traded lower Friday, while 1,100 others rose, as Wall Street wrapped up an otherwise strong week. In other words, about eight stocks fell for every five advancers.
— Fred Imbert
Bank of America downgrades SoFi Technologies
Bank of America downgraded SoFi Technologies to neutral from buy, saying the optimism around the stock has largely run its course. Investors expect the expiration of the student loan payment moratorium will be a positive for the stock.
"SoFi Technologies (SOFI) shares are up 100% over the past month vs. a 7% increase in the S&P 500, mainly because the debt deal brought certainty that the Federal Student Loan payment moratorium would end in September," read a note from the firm.
"While we agree the payment moratorium expiry is a positive, we now see the positive fundamental aspects of the story as largely priced in."
The stock is down more than 7% during Friday trading.
— Sarah Min
Stocks making the biggest moves midday
Check out the companies making headlines in midday trading.
- Virgin Galactic — Shares of the space company soared 13%. On Thursday, the firm set its first commercial space tourism flight for this month. The company, which was founded by billionaire Richard Branson, completed its final test spaceflight in May.
- iRobot — The stock surged 19% after U.K. regulators approved Amazon's $1.7 billion acquisition of the Roomba vacuum cleaner maker. Meanwhile, Amazon inched down about 0.5%.
- West Pharmaceutical Services — West Pharmaceutical Services gained 2.3% after Bank of America upgraded the life sciences stock to buy from neutral, saying it will benefit from the rise of drugs targeting weight loss.
Read the full list here.
— Sarah Min
Energy lags as stocks head toward a winning week
Energy stocks are sitting out the S&P 500's rally as the broad index nears the end of what is shaping up to be its best week since March.
The sector is on track to end the week down 0.9% and is the only one of the 11 S&P 500 sectors poised for weekly losses. By comparison, the broad index is slated to gain more than 3% in what could be its best weekly performance since March. Information technology sits on the opposite end of the spectrum as the best-performing sector this week, on pace to finish more than 5% higher.
— Alex Harring
Cybersecurity ETF poised to notch best week of 2023
The Global X Cybersecurity ETF (BUG) is on track for its best week of the year.
With just Friday's session left, the fund is up 6% on the week. If it holds, that would be the best weekly performance for the ETF since Nov. 11, 2022, when it finished the week 11.3% higher.
Darktrace has led the fund higher, gaining more than 19% this week as investors cheered the company's buyback announcement. SentinelOne has gained more than 10% this week, as has Palo Alto Networks, which will replace Dish in the S&P 500 after Friday's close.
— Alex Harring, Gina Francolla
Inflation outlook falls sharply in key consumer survey
Consumer inflation expectations tumbled in June, providing support for the Federal Reserve in its battle against rising prices.
The closely watched University of Michigan Survey of Consumers showed that one-year expectations plunged to 3.3%, down from 4.2% the prior month. That's the lowest level since March 2021.
The headline reading for the survey posted a 63.9 reading, better than the Dow Jones estimate for 60.2 and up from May's 59.2.
Fed's Barkin 'comfortable' with more hikes if inflation doesn't improve
Richmond Federal Reserve President Thomas Barkin said Friday that he would be fine with raising interest rates if inflation doesn't continue coming down.
"I want to reiterate that 2% inflation is our target, and that I am still looking to be convinced of the plausible story that slowing demand returns inflation relatively quickly to that target. If coming data doesn't support that story, I'm comfortable doing more," Barkin said in prepared remarks for a speech in Maryland.
"I recognize that creates the risk of a more significant slowdown, but the experience of the '70s provides a clear lesson: If you back off inflation too soon, inflation comes back stronger, requiring the Fed to do even more, with even more damage," he added. "That's not a risk I want to take."
Barkin is a nonvoting member this year on the rate-setting Federal Open Market Committee.
— Jeff Cox
Stocks open higher
The major averages rose Friday, building on their weekly gains. The S&P 500, Dow and Nasdaq were all up 0.4% to start the session.
— Fred Imbert
Services activity in New York area still in contraction
Service sector activity in the New York region remains under pressure, though the pace of the slowdown appears to be slowing, according to a Federal Reserve report Friday.
The New York Fed's Business Leaders Survey for June saw a reading of -5.2 for the headline activity index, representing the difference between companies reporting expansion against contraction. That's an improvement of 12 points and the highest level in several months.
The business climate index also improved, up 10 points but still to a "staunchly negative" reading of -35.6, the report said. The reading comes a day after the central bank's manufacturing gauge for the region unexpectedly surged 38 points to a reading of 6.6.
— Jeff Cox
Bank of America hikes price target for Meta on AI potential
Recent breakthroughs in artificial intelligence can help Meta Platforms leverage its massive messaging platforms, according to Bank of America.
"We think AI capabilities, and LLMs in particular, are well suited to enhance text-based Messaging services, and should provide improvements around audience targeting, automated customer support, online shopping, order taking, generative advertising, and text to image/video solutions," analyst Justin Post said in a note to clients.
Post raised his price target on the stock by $20 to $320 per share. Meta was up slightly in premarket trading at about $283 per share.
— Jesse Pound
Fed's Waller says inflation fight will continue
Federal Reserve Governor Christopher Waller on Friday vowed that the central bank would not back down in its efforts to bring down inflation.
"The Fed's job is to use monetary policy to achieve its dual mandate, and right now that means raising rates to fight inflation," Waller said in prepared remarks for a speech in Oslo, Norway.
Addressing the banking crisis in March, he rejected the notion that the Fed's aggressive rate hikes were a cause.
"It is the job of bank leaders to deal with interest rate risk, and nearly all bank leaders have done exactly that. I do not support altering the stance of monetary policy over worries of ineffectual management at a few banks," he said.
— Jeff Cox
2-year Treasury yield climbs as investors assess interest rate outlook
U.S. Treasury yields rose on Friday as investors considered the path ahead for interest rates and looked to comments from Federal Reserve officials for details about potential further rate hikes. In guidance issued alongside the central bank's decision to keep rates unchanged earlier this week, it had indicated that rates may go higher still this year.
— Sophie Kiderlin
European equity markets open cautiously higher
European stock markets opened cautiously positive on Friday as investors digested the latest monetary policy decision from the European Central Bank.
The pan-European Stoxx 600 index was up 0.2% as trading started, with most sectors in marginally positive territory. Mining stocks led minor gains with a 0.6% uptick, followed by oil and gas, which was up 0.4%. Retail dropped 0.2%, while autos were down 0.1%.
— Hannah Ward-Glenton
Bank of Japan leaves rate unchanged, holding them at ultra low levels
Japan's central bank maintained its ultra loose monetary policy on Friday, electing to support fragile economic growth at a time of swirling global uncertainty.
The Bank of Japan held its short-term interest rate target at -0.1% and made no changes to its yield curve control policy, in line with economists' expectations.
— Clement Tan
There's a strong trend of people in China changing to EVs, car portal says
China has seen a strong trend of people changing to electric vehicles, with EV retail sales growing 46% year-over-year, said Craig Yan Zeng, chief financial officer of Chinese car portal Autohome.
The country's auto market performed strongly with a year-over-year growth of 4.2%, Yan told CNBC's "Street Signs Asia," adding that China's "number one export good" is now the automobile.
The younger generation cares about environmental concerns and likes new EV technology such as auto drive, the CFO explained. "EV becomes ... young people's first choice when they select their car."
China is also able to support its car manufacturers with full EV supply chains, he added.
— Audrey Wan
Singapore non-oil domestic exports tumble more than expected in May, for eighth-straight month of decline
Singapore's non-oil domestic exports slid 14.7% year-on-year in May, a larger fall than the 9.8% decrease in April and more than the 8.1% drop expected by economists polled by Reuters.
The May figures also mean that Singapore's non-oil domestic exports have declined for eight straight months. On a month-on-month seasonally adjusted basis, non-oil domestic exports tumbled by 14.6%, sharply higher than the 1.3% fall forecast.
Government data revealed that both exports of electronics and non-electronics declined, with exports to Hong Kong, Malaysia and Taiwan leading the drop. In contrast, exports to the U.S. and China rose.
Singapore's total trade declined by 17.9% year-on-year in May, following the 18.9% contraction in the preceding month.
Total exports declined by 15.2%, slightly smaller than April's 18.1% decrease. Meanwhile, total imports contracted by 20.7%, extending the previous month's 19.7% decline.
— Lim Hui Jie
Virgin Galactic surges 40% after setting first commercial flight
The flight has a targeted launch window between June 27 and June 30. Virgin Galactic said it has plans for a second commercial flight in early August, with monthly commercial flights expected to follow.
Virgin Galactic stock has gained 16.7% this year.
— Alex Harring, Michael Sheetz
Adobe rises on strong earnings report
Adobe rose more than 3% after the bell following a strong quarterly report and upbeat guidance.
In its fiscal second quarter, the company posted $3.91 in adjusted earnings per share on $4.82 billion in revenue. That exceeded expectations of analysts polled by Refinitiv, who forecasted $3.79 per share and $4.77 billion.
Adobe also offered guidance for performance in the current quarter and full year that was either in line with or exceeded Wall Street expectations.
— Alex Harring
Nasdaq Composite on pace for eighth positive week in a row, the longest streak since 2019
The Nasdaq Composite is on pace to end this week with a bang, up 3.95% since Monday.
This would mark eight weeks of wins if the tech-heavy index holds onto the gain. It also marks its eighth consecutive winning week, a feat the index hasn't accomplished since 2019. Back then, the Nasdaq scored 10 straight positive weeks, ending on March 1 of that year.
-Darla Mercado, Chris Hayes
Stock futures are little changed
The three major future indexes were all near flat shortly after 6 p.m. ET.
All three were within 0.1% of their flatlines.
— Alex Harring