Editor
U.S. stocks edged higher Friday but were set for weekly losses due to concerns over high inflation and interest rates.
Major U.S. stocks are into weekly losses despite Friday’s higher session. Today’s session saw Wall Street and U.S. stocks edge higher to end this week’s session, but still, the losses were high to cover. However, the Nasdaq Composite and Tech Stock had a pretty good week despite the negative previous session when the index was down by 0.70%.
Due to concerns about the April Fed meeting the persistent inflation and delayed interest rate cuts, market uncertainty increased. Initially, the market was hoping to start interest rate cuts in June; however, based on the latest inflationary data, the Fed official chose the more cautious path, the long-term path in some sense. As for market expectations about interest rate cuts, Goldman Sachs analysts now expect the Federal Reserve to cut interest rates in September, postponing their earlier prediction of July. Additionally, the CME FedWatch tool shared its new data results, which reveal the market probability of cutting rates. In September, it was currently 45%. The data also shows a probability of rising interest from the current 5.25% to 5.5%.
Meanwhile, the free economic data released on Friday shows that durable goods orders grew 0.7% in April, slightly down from 0.8% growth in March. The data suggest that inflation remains high, and as stated before, reaching the Fed target of 2% will take much longer and even extend to the next year, 2025. And that is what Goldman Sachs predicted last year.
Federal Reserve Governor Christopher Waller, who is a leading voice at the U.S. Federal Reserve, suggests the possibility of rising interest rates in the future. Waller spoke and said that there is a slight possibility of raising the “R” rate in the future, despite the uncertainty of the decision. The R-star is the level of interest rates that neither stimulates nor restricts the economy, anchoring inflation at the Fed’s target.
While in the U.S. stock market, at 13:45 ET, the Dow Jones Industrial Average rose 68 points (0.18%), the S&P 500 increased 36 points (0.36%), and the NASDAQ Composite gained 171 points (1.2%).
In the corporate news, major stocks were mixed between high falls and big jumps. Starting with the main event, Nvidia, the company stock jumped by a solid 10% in the previous session, and today the company shares rose 0.2%, continuing its strong Q1 earnings report. Lucid Group’s (NASDAQ: LCID) stock rose 1% after announcing a 6% workforce reduction. Deckers Outdoor (NYSE: DECK) stock surged 12% on strong sales growth, driven by the HOKA and UGG brands. Intuit (NASDAQ: INTU) shares dropped 8% due to weak guidance and concerns over TurboTax user losses. Workday (NASDAQ: WDAY) shares fell 10% after cutting its annual subscription revenue forecast.
Moving to the oil market, crude oil prices follow the path of the U.S. stock this week. Despite the increase this session, crude prices are experiencing weekly losses this week. And in the same context, the weekly losses were due to interest rate cuts and U.S. economic activity. The West Texas intermediate rose by 1.12% to $77.6 per barrel, whereas Brent crude oil rose by 0.96% to $82.41 per barrel.
