US stocks hovered near record highs on Friday as Wall Street moved towards closing another winning week, buoyed by hopes that the Federal Reserve will cut interest rates in September.
The S&P 500 was virtually unchanged in early trade, a day after notching a fresh all-time high, and was on track for its fourth winning week in the last five. The Dow Jones Industrial Average was up 141 points, or 0.3%, while the Nasdaq composite slipped 0.1%, according to AP.
Investor optimism has grown on expectations of a September rate cut, which could boost asset prices and spur economic activity by lowering borrowing costs for US households and businesses. However, lower rates also risk fuelling inflation. A weaker-than-expected US wholesale inflation report on Thursday trimmed some of the rate-cut optimism, but traders still largely expect the Fed to act. Treasury yields have retreated sharply in recent days and were steady on Friday.
Economic data released Friday painted a mixed picture: US retail sales rose as forecast in July, manufacturing in New York state unexpectedly expanded, but nationwide industrial production fell, missing expectations for modest growth. Later in the day, a consumer sentiment report on inflation and the economy was awaited.
On Wall Street, UnitedHealth Group soared 10.3% after Warren Buffett’s Berkshire Hathaway disclosed the purchase of nearly 5 million shares in the insurer during the spring, valued at $1.57 billion. Berkshire Hathaway shares gained 0.2%.
Applied Materials fell 12.5% despite posting quarterly results above analyst forecasts, as its revenue guidance for the current quarter disappointed investors. CEO Gary Dickerson cited a “dynamic macroeconomic and policy environment” creating uncertainty, particularly for the company’s China business. Sandisk dropped 4.9% after its upbeat quarterly profit was overshadowed by a weaker-than-expected profit outlook.
In Asia, Japan’s Nikkei 225 rose 1.7% on stronger-than-expected GDP growth, while Shanghai gained 0.8% and Hong Kong’s Hang Seng shed 1% after data showed China’s economy slowed across key indicators in July, prompting calls for more policy support.
ING Economics noted, “Chinese economic activity slowed across the board in July, with retail sales, fixed asset investment, and value added of industry growth all reaching the lowest levels of the year. After a strong start, several months of cooling momentum suggest that the economy may need further policy support.”
European markets traded mixed ahead of a scheduled meeting between US President Donald Trump and Russian President Vladimir Putin, which could influence the direction of the war in Ukraine.
In bonds, the 10-year US Treasury yield held at 4.29%, while the two-year yield slipped to 3.72% from 3.74%.
The S&P 500 was virtually unchanged in early trade, a day after notching a fresh all-time high, and was on track for its fourth winning week in the last five. The Dow Jones Industrial Average was up 141 points, or 0.3%, while the Nasdaq composite slipped 0.1%, according to AP.
Investor optimism has grown on expectations of a September rate cut, which could boost asset prices and spur economic activity by lowering borrowing costs for US households and businesses. However, lower rates also risk fuelling inflation. A weaker-than-expected US wholesale inflation report on Thursday trimmed some of the rate-cut optimism, but traders still largely expect the Fed to act. Treasury yields have retreated sharply in recent days and were steady on Friday.
Economic data released Friday painted a mixed picture: US retail sales rose as forecast in July, manufacturing in New York state unexpectedly expanded, but nationwide industrial production fell, missing expectations for modest growth. Later in the day, a consumer sentiment report on inflation and the economy was awaited.
On Wall Street, UnitedHealth Group soared 10.3% after Warren Buffett’s Berkshire Hathaway disclosed the purchase of nearly 5 million shares in the insurer during the spring, valued at $1.57 billion. Berkshire Hathaway shares gained 0.2%.
Applied Materials fell 12.5% despite posting quarterly results above analyst forecasts, as its revenue guidance for the current quarter disappointed investors. CEO Gary Dickerson cited a “dynamic macroeconomic and policy environment” creating uncertainty, particularly for the company’s China business. Sandisk dropped 4.9% after its upbeat quarterly profit was overshadowed by a weaker-than-expected profit outlook.
In Asia, Japan’s Nikkei 225 rose 1.7% on stronger-than-expected GDP growth, while Shanghai gained 0.8% and Hong Kong’s Hang Seng shed 1% after data showed China’s economy slowed across key indicators in July, prompting calls for more policy support.
ING Economics noted, “Chinese economic activity slowed across the board in July, with retail sales, fixed asset investment, and value added of industry growth all reaching the lowest levels of the year. After a strong start, several months of cooling momentum suggest that the economy may need further policy support.”
European markets traded mixed ahead of a scheduled meeting between US President Donald Trump and Russian President Vladimir Putin, which could influence the direction of the war in Ukraine.
In bonds, the 10-year US Treasury yield held at 4.29%, while the two-year yield slipped to 3.72% from 3.74%.
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