By Stephen Culp
NEW YORK (Reuters) -U.S. stocks rose and crude oil prices recovered after positive economic data on Friday, as investors positioned themselves ahead of the long U.S. Memorial Day weekend and the unofficial start of summer.
The tech-heavy Nasdaq and the advanced, while the Dow closed nominally higher.
The light-volume session capped a week in which the minutes of the Federal Reserve’s latest policy meeting struck a hawkish tone, solid economic data pointed to the possibility of rising inflation and mega-cap chipmaker Nvidia (NASDAQ:) reported earnings that investor interest in artificial intelligence has been reignited.
“After yesterday’s very tough day, it was nice to see the bulls getting an edge into the long holiday weekend,” said Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska. “The economy continues to surprise positively. That’s why shares are flirting with record highs.”
On a weekly basis, the S&P 500 and the Nasdaq posted their fifth straight gains Friday through Friday, while the Dow Jones was on track to break its five-week winning streak.
Investors have increasingly bought into the higher-for-longer interest rate narrative following the release of the Fed’s minutes on Wednesday, as well as cautious comments from policymakers who expressed doubts about whether inflation is indeed on track. reliable downward trajectory.
The financial markets are now expecting only one interest rate cut in 2024, a far cry from the six cuts predicted earlier this year.
On the economic front, new orders for durable goods in the US rose more than expected, while the University of Michigan’s final view of consumer confidence rose higher in May.
“The realization that the economy is not slowing has pushed back any summer rate cuts,” Detrick added. “July is probably off the table, but as (Fed Chairman) Jerome Powell has said, with improving inflation data over the summer, a September rate cut has a chance.”
The index rose 4.33 points, or 0.01%, to 39,069.59, the S&P 500 gained 36.88 points, or 0.70%, to 5,304.72 and added 184.76 points, or 1, 1%, to 16,920.79.
European shares closed lower, posting a weekly decline as sentiment was dampened by the resurgence of interest rate concerns.
The pan-European index lost 0.19% and the MSCI index for shares around the world gained 0.34%.
Emerging market stocks lost 0.73%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.88% lower, but lost 1.17%.
Treasury yields were mixed after reports confirmed the U.S. economy remains resilient, which could convince the Fed not to cut rates this year.
Benchmark 10-year bonds last rose 2/32 in price to yield 4.4669%, up from 4.475% late Thursday.
The 30-year bond last rose 4/32 in price to yield 4.5729%, up from 4.58% late Thursday.
The dollar fell against a basket of world currencies but remained well positioned to resume its advance as stronger-than-expected economic data prompted markets to reverse expectations for interest rate cuts.
The rate fell 0.36%, while the euro rose 0.31% to $1.0847.
The Japanese yen was flat against the dollar at 156.93 per dollar, while the British pound was last trading at $1.2739, up 0.33% on the day.
Crude oil prices rose slightly after being under pressure for much of the week as the prospect of prolonged restrictive Fed policy dampened the demand outlook.
rose 1.11% to $77.72 per barrel from $82.12 per barrel, up 0.93% on the day.
The gold price rose, but fell for the first time in three weeks due to lower expectations for interest rate cuts.
added 0.3% to $2,336.03 an ounce.
