Wall Street Rises, S&P 500 Eyes First Gain Since Christmas Eve/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The S&P 500 rose 0.6% early Friday, poised for its first gain since Christmas Eve, breaking a five-day losing streak. U.S. Steel dropped 5.2% following a blocked merger, while Tesla rebounded slightly. Traders remain cautious amid inflation concerns and potential tariff impacts.
Stock Market Trends: Quick Looks
- Market Recovery: S&P 500 up 0.6%, breaking a five-day slump, the longest since April.
- Other Indices: Dow Jones rose 0.5%, and Nasdaq climbed 0.8%.
- Tesla Rebound: Gained 0.8% after a sharp fall due to missed delivery expectations.
- U.S. Steel Decline: Shares fell 5.2% after President Biden blocked a $15 billion merger.
- Global Markets: Shanghai down 1.6% for the week; South Korea’s Kospi up 1.8% on government intervention.
- Economic Outlook: Stubborn inflation and potential tariffs loom over market optimism.
Wall Street Rises, S&P 500 Eyes First Gain Since Christmas Eve
Deep Look
The S&P 500 gained early momentum on Friday, advancing 0.6% in the morning session to potentially secure its first positive close since Christmas Eve. This upward movement breaks a five-day losing streak, the index’s longest since April. Alongside it, the Dow Jones Industrial Average climbed 228 points, or 0.5%, while the tech-heavy Nasdaq composite added 0.8%.
However, the optimism is tempered by upcoming economic data. A report due later in the morning is expected to show continued contraction in U.S. manufacturing, a sector significantly affected by the Federal Reserve’s high interest rates aimed at curbing inflation.
Key Movers
Tesla saw a modest recovery, rising 0.8% after plummeting 6.1% the day before due to disappointing vehicle delivery numbers for Q4 2024. On the flip side, U.S. Steel suffered a sharp decline of 5.2% after President Joe Biden intervened to block a proposed $15 billion acquisition by Japan’s Nippon Steel, citing antitrust concerns.
Wall Street’s recent pullback has slightly dulled the glow of a stellar run over the past two years, marked by record-setting performances despite high interest rates. These rates, while taming inflation to near the Fed’s 2% target, have also added pressure on various sectors of the economy.
Inflation, Tariffs, and Uncertainty
The Fed’s efforts to manage inflation continue to dominate market sentiment. Traders had anticipated further interest rate cuts through 2025 following a September easing. However, persistent inflation has led to scaled-back expectations, raising concerns about potential rate hikes instead.
Adding to these concerns are trade policies from incoming President Donald Trump, including proposed tariffs that could exacerbate inflationary pressures. Critics warn that U.S. stock valuations appear inflated relative to corporate profits, increasing vulnerability to economic headwinds.
Global Market Reactions
The impact of these developments extends beyond U.S. borders. In China, stocks in Shanghai dropped 1.6%, marking a weekly loss of 5.6% amid ongoing struggles in the property market. Hong Kong stocks edged up 0.7%, trimming weekly losses.
South Korea’s Kospi, however, surged 1.8%, buoyed by reassurances from acting president and finance minister Choi Sang-mok, who pledged measures to stabilize the nation’s economy amid political turmoil. Meanwhile, European markets showed mixed results, reflecting broader global uncertainties.
Bond Market Stability
In the bond market, Treasury yields held steady, with the 10-year yield remaining at 4.56% and the two-year yield slipping slightly to 4.24%. These levels reflect cautious optimism as traders await further clarity on the Fed’s next moves and broader economic conditions.
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