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Major market averages concluded trading on Friday slightly higher as equities ended the first holiday-shortened week of September.
The tech-heavy Nasdaq Composite (COMP.IND) finished +0.09%, as Apple (AAPL) tried to rebound after sliding more than 6% over the past two days amid headlines concerning China’s ban of iPhone use in government agencies.
At the same time, the benchmark S&P 500 (SP500) concluded Friday’s session by +0.14%, while the blue-chip Dow (DJI) ended +0.22%.
For the week, the Dow was -0.75% and finished trading at 34,577, the S&P 500 was -1.29% and finished trading at 4,457 and the Nasdaq Composite was -1.92% and finished trading at 13,761.
Of the 11 S&P sectors, eight rounded out the day in positive territory, which was led by Energy. Real Estate and Industrials topped the losers.
Turning to the fixed-income markets, Treasury yields concluded higher on the shorter end. The longer-end 10-year yield (US10Y) was down 1 basis point to 4.25%, while the more rate-sensitive 2-year yield (US2Y) was up 3 basis points to 4.98%.
See how Treasury yields have done across the curve at the Seeking Alpha bond page.
With the latest jump in oil prices in the past few days driven by longer-than-expected production cuts by key oil nations Saudi Arabia and Russia, along with confounding labor market data in the form of initial jobless claims falling for a fourth straight week, all eyes are now on next Wednesday’s consumer price index (CPI) report for further clarity on the Fed’s future monetary policy actions.
”For the U.S. economy, the labor market is not softening quickly enough and that makes the Fed stick to the hawkish script that they might not be done raising rates” said Edward Moya, senior market analyst, OANDA.
Next week’s CPI report will be the last one before the central bank’s monetary policy committee meeting from September 19 to 20. According to the CME FedWatch tool, the FOMC is widely expected to hold rates steady, but markets remain divided on whether another hike is warranted later this year.
Fed officials yesterday agreed that more needs to be done in the fight against inflation, and reiterated that the central bank will continue to take a data-dependent approach.
Market participants will also be looking out for the European Central Bank’s (ECB) policy decision next week. Deutsche Bank expects the ECB to keep rates unchanged.
“The ECB needs to maintain sufficiently restrictive financial conditions for long enough to ensure inflation returns sustainably to target. The ECB cannot afford for the market to interpret a pause as an inflection point in the monetary policy cycle. To inject more credibility into the message that it is prepared to raise rates further if necessary and stay higher for longer, we expect the ECB to utilize uncertainty,” Deutsche Bank’s Mark Wall said.
Taking a look at some of Friday’s active movers, Kroger (KR) was among the top percentage gainers on the S&P 500 (SP500), despite reporting a quarterly revenue drop and a miss on identical sales. The retailer’s joint announcement with Albertsons (ACI) to sell more than 400 stores for $1.9B to C&S Wholesalers was cheered as the move might help the companies win U.S. antitrust approval for their proposed $25B merger.