Stocks were in mixed territory on Friday, with the Dow retreating slightly even as the prospect of deeper and earlier interest rate cuts continued to cheer Wall Street.
The Dow Jones Industrial Average (^DJI) fell 0.2%, or about 70 points, after the blue-chip index closed at a new high Thursday. The S&P 500 (^GSPC) was almost unchanged, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.
Markets cheered after the Federal Reserve’s surprise shift in dovish tone this week, signaling more rate cuts in 2024 and admitting its anti-inflation campaign is gaining traction. That helped drive a record-breaking rally in US stocks, with major indexes posting six consecutive winning sessions.
read more: What is the central bank’s rate hike suspension for bank accounts, CDs, loans and credit cards?
But the upbeat mood may be starting to fade as some observers warn that markets may be getting ahead of themselves. New York Fed President John Williams told CNBC on Friday that talk of a rate cut was “premature.” In contrast to the central bank’s recent signals, central banks in Europe have not dampened hopes for policy easing.
Meanwhile, about $5 trillion in U.S. stock options expire Friday, about 80% of S&P 500-linked contracts. Some analysts believe such a massive expiration could cap any traction in at least 20 years.
Elsewhere, oil prices rose, on track for their first weekly gain since October and were boosted by the Fed’s fall in the dollar. West Texas Intermediate (CL=F) futures traded at nearly $72 a barrel, while Brent crude futures (BZ=F) settled at around $77 a barrel, after rising more than 4% in the previous two sessions.
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