US benchmark equity indexes exhibited mixed performance during intraday trading as traders evaluated comments made by two Federal Reserve governors. The Nasdaq Composite experienced a minor decline of 0.2%, settling at 17,969.9, while the S&P 500 also slipped 0.1% to 5,707.2. Conversely, the Dow Jones Industrial Average saw a slight gain of 0.2%, reaching 42,113.7.
Among various sectors, materials and industrials faced the largest drops, whereas utilities led the gains. This past Wednesday, the Federal Open Market Committee (FOMC) of the central bank made the strategic decision to lower its benchmark lending rate by 50 basis points, bringing it to a range of 4.75% to 5%.
Fed Governor Michelle Bowman expressed her preference for a more modest 25-basis-point cut during the meeting. Bowman remarked, "Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5%, I see the risk that the committee's larger policy action could be interpreted as a premature declaration of victory on our price stability mandate." In another statement, Fed Governor Christopher Waller indicated his support for the 50-basis-point cut, citing that "inflation is softening much faster than I thought it was going to," as reported by CNBC. The FOMC's Summary of Economic Projections from Wednesday revealed a downward adjustment of policymakers' median federal funds rate outlooks spanning from 2024 to 2026, accompanied by a raised outlook on unemployment rates. Stifel communicated to its clients that "after a bit of a digestion period, investors are now praising the Fed's 'recalibration' of policy.
Following a larger, more aggressive (50-basis-point) cut out of the gate, the market now seems to be anticipating a rush back to accommodation, as opposed to policy simply resetting from restrictive back to neutral." On the bond market front, the US two-year yield dropped three basis points to stand at 3.57% intraday, while the 10-year rate decreased by 1.9 basis points to reach 3.72%. In company-specific news, FedEx ($FDX) saw its shares fall by 13%, marking the steepest decline within the S&P 500.
The parcel delivery giant's fiscal first-quarter results, released late Thursday, reported an unexpected year-over-year decline amid weak demand trends. Meanwhile, Constellation Energy ($CEG) secured a significant 20-year power purchase agreement with Microsoft ($MSFT), aimed at restarting the Three Mile Island nuclear plant in Pennsylvania.
This initiative is designed to provide carbon-free energy to support Microsoft’s data centers. As a result, Constellation's shares surged by 20% intraday on Friday, making it the top performer on both the S&P 500 and the Nasdaq, while Microsoft experienced a slight decline of 0.4%. Nike ($NKE) emerged as the leading gainer on the Dow and ranked among the top performers on the S&P 500, showing an increase of 6.5%.
Late Thursday, it was announced that John Donahoe would retire as chief executive next month, paving the way for former longtime executive Elliott Hill to return and take charge of the company. In commodities, West Texas Intermediate crude oil saw a rise of 0.4%, reaching $72.26 a barrel during intraday trading.
Gold prices increased by 1.2%, settling at $2,645.70 per troy ounce, while silver grew by 0.2%, now priced at $31.5 per ounce..