US benchmark equity indexes ended the week on a negative note, as investors processed the latest comments from Federal Reserve officials alongside new economic data. The Nasdaq Composite dropped 2.2%, finishing at 18,680.1, while the S&P 500 fell by 1.3% to 5,870.6. The Dow Jones Industrial Average declined 0.7%, closing at 43,445.
The technology sector faced the steepest drop, down 2.5%, while utilities became the standout performers. Over the course of the week, the Nasdaq saw a decrease of 3.2%, while the S&P 500 lost 2.1%, and the Dow retreated by 1.2%. Chicago Fed President Austan Goolsbee indicated that policymakers are progressing toward their economic goals, suggesting that they could maintain a path of easing monetary policy.
Meanwhile, Boston Fed President Susan Collins expressed that a reduction in interest rates next month is “certainly on the table, but it's not a done deal.” Fed Chair Jerome Powell has noted that the US economy is not currently signaling urgency for rate cuts. The expectations for a potential interest rate cut by 25 basis points next month dropped to 58% on Friday, down from a previous 72% earlier in the week, as indicated by the CME FedWatch tool.
Meanwhile, the likelihood of rates remaining stable rose to 42%. In the bond market, the US 10-year yield increased by 2.5 basis points to 4.45%, while the two-year rate rose by 1.3 basis points to 4.31%. In the realm of economic indicators, retail sales in the US saw a more significant increase than anticipated in October, spurred by a boost in auto purchases.
Notably, September's figures were also revised upward. Industrial production fell for a second consecutive month in October, impacted by a recently resolved strike at Boeing ($BA) and the aftermath of two hurricanes, according to data from the Federal Reserve. However, improvements are expected in industrial production this month due to the end of the strike and diminishing hurricane impacts, although the output for motor vehicles and parts isn't anticipated to recover swiftly, remarked analysts from Oxford Economics. New York's manufacturing sector experienced a rebound in November, reaching its highest level in nearly three years, with orders and shipments trending positively, the New York Federal Reserve indicated. In energy markets, West Texas Intermediate crude oil prices decreased by 2.5%, settling at $67.02 per barrel on Friday, as weekly losses loomed due to concerns about declining demand in China, as noted by D.A.
Davidson in a client brief. In corporate updates, Applied Materials ($AMAT) shares plummeted 9.2%, marking the worst performance on both the S&P 500 and the Nasdaq, following the semiconductor equipment supplier's announcement of a disappointing revenue outlook for the quarter. FuelCell Energy ($FCEL) reported that it would reduce its workforce by 17% as part of a global restructuring plan to cut costs amid sluggish investments in clean energy, resulting in a 12% drop in their stock price. Conversely, Palantir Technologies ($PLTR) saw its shares rise by 11%, becoming the top performer on the S&P 500.
The software company announced plans to shift the listing of its class A common shares to the Nasdaq Global Select Market from the New York Stock Exchange, effective November 26. Walt Disney ($DIS) emerged as the top gainer on the Dow and one of the best on the S&P 500, rising 5.5% after a 6.2% jump the day before when it exceeded fiscal fourth-quarter expectations. In metals trading, gold fell by 0.3% to $2,566.40 per troy ounce, while silver saw a decrease of 0.8%, trading at $30.32 per ounce..