Editor
The S&P 500 and Dow experienced subdued and choppy trading on Friday after comments from New York Federal Reserve President John Williams.
After starting this week’s final day trading session in a mixed manner, Wall Street main indexes rallied slightly and edged higher yet at a lower rate. The S&P 500 benchmark rose by 0.05%, the Nasadq composite was up by 0.08%, and the Dow jumped by 0.05%, as of 13:40 a.m. ET.
The 2023 year was certainly a controversial year for the U.S. and the global economy as well. The year was driven by market uncertainties and macroeconomic changes. Still, with recent strong economic data, the market hopes to see an end to the most aggressive monetary tightening policy in the last two decades.
As for today’s choppy gains on Wall Street, the sudden decline was due to recent comments from the U.S. Federal Reserve chairman. On Wednesday, U.S. Federal Reserve Chairman Jerome Powell signaled that interest rates would remain unchanged. Today the prescient comes with new comments saying that their mission to tame inflation is not over yet.
New York Federal Reserve President John Williams Williams emphasized that the Fed is still evaluating whether its monetary policy is on the right path to bring inflation back to its 2% target, pushing back against market expectations of rate cuts.
Despite Williams’ comments, the S&P 500 was on track for its longest weekly winning streak in over six years, following the Fed’s decision to leave interest rates unchanged and indicate lower borrowing costs in the future. As for the equity market, the big changes and positive economic data in the S&P sector and stock market caused a significant rally in equities. The Dow Jones Industrial Average notched its second straight record high close on Thursday. driven by the Fed’s acknowledgment of slowing inflation and the prospect of lower borrowing costs. Moving to the tech-heavy Nasadq composite, the benchmark gained more than 39% of its losses this year, driven by better-than-expected third-quarter earnings reports and a rally in the AI market. Broadly speaking, it seems that the market is recovering faster than the market estimation. In turn, it supports the probability that 2024 will be the year of a full recovery.’
In other economic news, A survey on Friday showed a pickup in domestic business activity in December, alleviating fears of a sharp slowdown in economic growth in the fourth quarter.
However, market volatility has increased due to Willaime’s comments, which caused a mixed early session. On top of that, expectations for Fed actions are undergoing a shift, as reported by Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management Company.
Matt Stucky says, “They (the Fed) didn’t really emphasize (the wage environment) as much of a risk to their inflation forecast as was expected. What you saw with that was a change in expectations for Fed actions.”
Meanwhile, in the oil market, the West Texas Intermediate was up by 0.2% to $71.72 per barrel. Berent crude oil jumped by 0.35% to $76.8 per barrel.
