U.S. Stock Market Update

By Chuck Mikolajczak
NEW YORK (Reuters)

The S&P and Dow eked out slight gains on Friday, erasing earlier losses after comments from U.S. President Donald Trump provided hope that previously announced tariffs are not as burdensome as feared.

Trump stated that there will be flexibility on tariffs and that his top trade chief plans to speak with his Chinese counterpart next week. He reiterated his intention to use duties to narrow the U.S. trade deficit with China.

Markets have experienced pressure recently due to changing announcements about tariffs, which clouded the outlook for corporate profits and the Federal Reserve’s monetary policy. However, stocks showed signs of recovery this week, with the S&P climbing over 1% on Wednesday after the Fed’s latest policy announcement. The central bank maintained rates and signaled that two cuts are likely this year.

Despite this, Michael Arone, chief investment strategist at State Street Global Advisors, expressed concern that investor efforts to rally the stock market largely failed. He highlighted uncertainty around trade policy, economic growth fears, and the monetary policy path.

Chicago Federal Reserve President Austan Goolsbee mentioned that the central bank requires more time to assess how Trump’s policies affect the economy, while New York Fed President John Williams reiterated that there is no urgency to alter monetary policy.

Market Performance:
– Dow Jones Industrial Average: Rose 32.03 points (0.08%) to 41,985.35
– S&P 500: Gained 4.67 points (0.08%) to 5,667.56
– Nasdaq Composite: Increased by 92.43 points (0.52%) to 17,784.05

The S&P was down as much as 1.06% earlier in the day. For the week, the S&P 500 gained 0.5%, the Nasdaq rose 0.17%, and the Dow climbed 1.2%, marking the largest weekly gain for the Dow in two months, while the Nasdaq and S&P 500 ended a four-week streak of declines.

As earnings season approaches next month, several companies are lowering forecasts. FedEx dropped by 6.45% after reducing its profit and revenue forecasts due to continued economic uncertainty. UPS also declined by 1.61%, with delivery companies acting as economic bellwethers. This downturn affected the Dow Jones Transport Index, which saw a 2.7% drop before closing down only 0.2%.

Nike was the worst performer among Dow Industrial components, sliding 5.46% after projecting a sharper revenue decline than expected. The materials sector dipped 1%, led by a 5.78% decrease in Nucor Corp’s shares due to lower-than-expected profit forecasts.

In contrast, Boeing’s stock climbed 3.06% after securing a contract for the U.S. Air Force’s advanced fighter jet. Lockheed Martin, its competitor, fell by 5.79%.

Friday’s trading session marked the expiration of quarterly derivatives contracts tied to stocks, options, and futures, a phenomenon known as “triple witching,” which can heighten market volatility.

Declining issues outnumbered advancers with a ratio of 1.93-to-1 on the New York Stock Exchange and 1.42-to-1 on Nasdaq. The S&P 500 recorded nine new 52-week highs and 16 new lows, while the Nasdaq Composite noted 38 new highs and 188 new lows.

Volume on U.S. exchanges reached 21.05 billion shares, compared to a 16.47 billion average over the last 20 trading days, marking the busiest day since January 7.