On Friday, the Dow Jones Industrial Average extended its record closing streak, achieving a modest gain of 0.1%, closing at 42,063.4. In contrast, the S&P 500 pulled back by 0.2%, closing at 5,702.6, as investors weighed the implications of remarks made by two Federal Reserve governors. The Nasdaq Composite also faced a decline, falling 0.4% to close at 17,948.3.
Among various sectors, utilities emerged as the frontrunners, while industrials and materials experienced the most significant declines. For the week, the Dow showcased an impressive gain of 1.6%, with the Nasdaq up by 1.5% and the S&P 500 adding 1.4%. This week, the Federal Open Market Committee of the central bank made headlines by lowering its benchmark lending rate by 50 basis points, bringing it into a new range of 4.75% to 5%.
Fed Governor Michelle Bowman expressed her preference for a smaller cut of 25 basis points during the same meeting. She emphasized the importance of acknowledging the substantial progress made in reducing inflation. However, she also raised concerns regarding the committee's larger policy actions possibly signaling premature triumph in achieving price stability, as core inflation has maintained levels around or above 2.5%. In a separate statement, Fed Governor Christopher Waller revealed his support for the more substantial 50-basis-point cut, citing the rapid softening of inflation that exceeded his prior expectations.
In remarks captured by CNBC, Waller explained the influence of a 'digestion period' on investors, who are now openly commending the Fed's recent 'recalibration' of its monetary policy. He noted that following an aggressive 50-basis-point cut, the market appears to be gearing up for a swift return to accommodative policies rather than simply shifting from restrictive to neutral. Moving on to bond yields, the US two-year yield dipped slightly by one basis point, settling at 3.6%, while the 10-year yield remained relatively stable at 3.74%. In company-specific news, Constellation Energy ($CEG) secured a significant 20-year power purchase agreement with Microsoft ($MSFT), which will see the energy firm restarting the Three Mile Island nuclear power plant in Pennsylvania.
This initiative aims to supply carbon-free energy to support Microsoft's data centers. As a result of this announcement, Constellation's stock surged by 22%, marking it as the best-performing stock on both the S&P 500 and Nasdaq, while Microsoft shares fell by 0.8%. Nike ($NKE) also had a stellar performance, becoming the leading gainer on the Dow and ranking among the top in the S&P 500 with a remarkable increase of 6.8%.
This upswing coincided with the late Thursday announcement regarding the upcoming retirement of CEO John Donahoe next month, with longtime company executive Elliott Hill set to return to lead Nike. In a noteworthy report, Qualcomm ($QCOM) was said to have made a takeover bid for chipmaker Intel ($INTC), as reported by The Wall Street Journal.
This news had a positive impact on Intel shares, which rose by 3.3%, placing it among the top gainers on both the Dow and Nasdaq, while Qualcomm experienced a decline of 2.9%. On the downside, FedEx ($FDX) struggled as the poorest performer on the S&P 500, witnessing a significant drop of 15%. The logistics giant's first-quarter results fell unexpectedly compared to the previous year, attributed to weak demand trends. In commodity markets, West Texas Intermediate crude oil fell by 0.3%, pricing at $71.77 a barrel.
Gold prices enjoyed a rise of 1.2%, reaching $2,645.20 per troy ounce, while silver values increased slightly by 0.1% to $31.45 per ounce..