The S&P 500 and Nasdaq rose on Friday as megacaps including Apple and Tesla gained ahead of a fresh inflation reading next week that will provide further clues on the U.S. interest rate trajectory. U.S. Treasury yields edged lower on Friday, helping boost major growth stocks, with Tesla and Meta Platforms leading gains, up about 1.6% each. Shares of Apple rose 1.3% after a two-day selloff following news that Beijing had ordered central government employees in recent weeks to stop using iPhones at workplaces. The Associated Press has the story:
Wall Street drifts as it heads to close short week with losses
Newslooks- NEW YORK (AP)
Stocks are drifting Friday, keeping Wall Street on track to close out its first losing week in the last three.
The S&P 500 was 0.2% higher following three straight days of declines. The Dow Jones Industrial Average was down 5 points, or less than 0.1%, at 34,495, as of 9:40 a.m. Eastern time, and the Nasdaq composite was 0.4% higher.
Stocks have been under pressure this week because of worries that a too-warm economy will push the Federal Reserve to keep interest rates high for longer. Traders have called off some bets for the Fed to cut rates next year, after reports showed the U.S. economy remains resilient despite much higher rates and struggles for other economies around the world.
Such worries have pushed yields higher in the bond market, which hurts stock prices. But yields were easing on Friday, helping to give Wall Street a bit of relief.
The yield on the 10-year Treasury dipped to 4.23% from 4.25% late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, slipped to 4.94% from 4.95%.
Companies are basically done with reporting their earnings results for the spring, but a few on Friday were making some of the largest moves.
Smith & Wesson Brands jumped 18.9% after the gun maker reported stronger results for the three months through July than analysts expected. The summer is usually a lean season for the company, but its sales rose 35% from a year earlier.
Kroger was 0.4% higher after swinging between gains and losses following its earnings report. The grocer’s profit for the latest quarter topped analysts’ expectations, but its revenue fell short of expectations.
The upcoming week could be a busier one for markets globally. The centerpiece is likely the latest monthly update on inflation in the United States, due on Wednesday. Economists expect it to show prices at the consumer level were 3.6% higher in August than a year earlier.
Inflation has been generally coming down since peaking above 9% last summer, but the worry is the last bit of improvement to get to the Fed’s 2% target may prove the most difficult. That’s why strong economic reports recently have unsettled the market. They could be providing fuel for U.S. households to keep spending, which encourage companies to try to push prices up further.
High rates are supposed to slow the economy and hurt the job market, which should help undercut inflation. But the highest rates in more than two decades have yet to do that. The threat is that could push the Fed to raise rates again and at the very least to keep them high for longer than investors expect.
Also coming next week will be a decision on rates by the European Central Bank and more data about China’s economy. China’s recovery since removing anti-COVID restrictions has fallen well short of expectations, which has removed a big driver of growth for the global economy but also helped to remove some upward pressure on inflation.
In stock markets abroad, Japan’s Nikkei 225 dropped 1.2% after a report showed the world’s third largest economy grew at a 4.8% annual pace in the April-June quarter. That’s weaker than an earlier estimate of 6% growth.
Indexes were modestly lower across much of the rest of Asia, though a bit higher across Europe.
