4:05pm: Nasdaq slips but Dow and S&P above water
At the close, US indices were mixed, with the Dow ahead by 0.5% at 33,869, the S&P 500 inching 0.2% higher at 4,090 and the Nasdaq slipping below opening levels to finish at 11,718 for a 0.6% loss on the day.
“It’s fair to say that it’s been a relatively quiet week across markets,” TickMill Group’s James Harte wrote in a note Friday.
“We’ve seen decent volatility, just little in the way of clear directional moves. Much of what has gone up, subsequently came down and vice versa. Weeks like this, however, are a good time to reflect on one’s trading and plan ahead as the big moves and key catalysts are never far away.”
He added: “Still, there has been plenty happening this week and chatting with traders ahead of the weekend it seems the big move capturing most attention is the almost 3% pullback in the S&P. So, let’s take a look at what cause the move and, as ever, if you caught it? Well done! If you missed it? There’s always next week!”
12:14 pm: Indexes climb but only Dow turns positive
At midday, the Dow was up 33 points, 0.1%, to 33,733, the Nasdaq Composite lost 144 points, 1.2%, to 11,646 and the S&P 500 shed 13 points, 0.3%, to 4,068. The Russell 2000 slid 4 points, 0.2%, to 1,911.
The benchmarks are trending in the right direction after a slow morning but only the Dow made it into the green.
Meanwhile, investors are looking ahead to next week’s CPI numbers.
“This week’s numbers for January could well go some way to establishing how many more rate rises could be on the way in the coming months,” said Michael Hewson, chief market analyst at CMC Markets UK. “The recent ISM services report showed that prices paid remained resilient at 67.8, while wages still appear to be looking resilient. This is likely to be reflected in a similar uptick in inflationary pressure with headline CPI expected to rise 0.4% on a monthly basis, and by 6.2% year on year. Core prices are expected to rise by 0.5% and 5.4% year on year.”
9.40 am: Week ending on downbeat note
US stocks kicked off the last day of the trading week mixed as recurring concerns over the Fed’s rate of interest rate hikes and disappointing corporate earnings were in focus.
Just after the market opened, the Dow Jones Industrial Average had added 12 points or 0.04% at 33,712 points, while the S&P 500 was down 3 points or 0.1% at 4,079 points and the Nasdaq Composite had shed 47 points or 0.4% at 11,740 points.
OANDA senior market analyst Craig Erlam said equity markets were ending the week on a flat or slightly downbeat note, which largely reflected the mood all week.
“Central bankers, particularly from the Fed, have been out in force stressing caution over interest rate expectations and it’s clearly had an impact following that red-hot jobs report last week,” he said.
“Markets are now pricing in two more hikes from the Fed and possibly one cut later in the year.”
Meanwhile, crude oil had added 1.1% at US$78.91 after Russia announced it plans to cut March oil production by 500,000 barrels a day.
6.30am: Soggy end to the week
Wall Street is expected to open down as the week draws to a close amid deteriorating sentiment, with investors looking ahead to next week’s consumer prices index (CPI) inflation report for further direction.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.4% in Friday pre-market trading, while those for the broader S&P 500 index declined 0.6%, and contracts for the Nasdaq-100 shed 1.1%.
US stocks turned around to end weaker on Thursday, weighed down by Nasdaq heavyweight Alphabet following a failed demonstration by its AI chatbot Bard AI, and as more Fed officials re-emphasised the need for interest rates to go higher.
The DJIA closed 0.7% down at 33,670, the Nasdaq Composite lost 1%, to 11,790, and the S&P 500 dropped 0.9% to 4,082.
“US stocks kicked off Thursday session on a positive note, but sentiment rapidly soured as the Fed hawks didn’t let the bulls enjoy gains,” commented Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“Topsellers will likely remain in charge of the market on the possibility that maybe inflation in the US may have not eased to 6.2% as expected by analysts. But nothing is clear before next Tuesday’s CPI release, in terms of Fed expectations,” she added.
The CPI data, due out on February 14, is expected to show headline inflation for January easing further from the 6.6% annual increase registered in December. Headline inflation is expected to show a month-over-month rise of 0.5%.
“For now, there is rising will to believe that the Fed will continue hiking the rates. If inflation numbers don’t show the easing expected, that willpower will get even stronger, and could result in a sharp pullback in the equity rally,” Ozkardeskaya said.