Fed Rate Cut Optimism Boosts US Stocks Despite Mixed Trading
Market Overview
U.S. stocks saw a mixed performance on Friday, with hopes of a Fed rate cut in June driving optimism and offsetting concerns over corporate earnings. Despite this mixed trading, the market remained on track for significant weekly gains.
Current Market Movement
As of 13:35 ET (18:35 GMT), the Dow Jones Industrial Average declined by 0.5%, the S&P 500 slipped by 0.1%, while the Nasdaq Composite gained 0.2%. These movements come after a week of record highs and are set to deliver weekly gains exceeding 2% for all three major indices.
Fed Rate Cut Expectations
Fed Chair Jerome Powell’s silence on monetary policy at a recent event did not deter market speculations of a rate cut as soon as June. The Fed’s commitment to multiple rate cuts this year, despite inflation concerns, has led to a 74% probability of a rate cut in June, up from 56% earlier in the week.
Corporate Earnings Impact
FedEx shares surged over 7% following strong earnings and a $5 billion share buyback announcement. In contrast, Nike tumbled by over 6% due to revenue warnings, while Lululemon Athletica saw a 14% drop based on lower revenue guidance than expected.
Tech Sector Performance
Nvidia’s 3% rise, Micron Technology’s positive outlook, and Apple’s recovery efforts post-regulatory concerns contributed to a tech sector boost. Nvidia’s AI chip shipment plans and Micron’s AI-driven revenue forecasts added to market positivity.
Upcoming IPO
Former President Donald Trump’s social media company, set to begin trading soon, is expected to bring significant market value. The company’s launch, including the platform Truth Social, is anticipated to be a notable event next week.
(Note: This article was written collaboratively by various contributors.)
