The US benchmark equity indexes displayed mixed results on Friday as investors positioned themselves ahead of the Federal Reserve's upcoming monetary policy decision next week. The Dow Jones Industrial Average decreased by 0.2% to close at 43,828.1, while the Nasdaq Composite crept up by 0.1% to finish at 19,926.7.
Meanwhile, the S&P 500 remained relatively stable at 6,051.1. Within sectors, communication services reported the steepest decline, whereas technology stocks experienced notable gains. Examining the week’s overall performance, the Dow saw a decline of 1.8%, and the S&P 500 dropped by 0.6%. On a brighter note, the Nasdaq gained 0.3% for the week. Recent official US data revealed that monthly consumer inflation picked up, aligning with market predictions for November, while producer prices surged beyond expectations.
The probability that the Federal Open Market Committee will implement a 25 basis point interest rate cut next week soared to 93% by Friday, a rise from 86% the previous week, based on the CME FedWatch tool. In a commentary, Stifel expressed, "In light of Wednesday's consumer price index increase, yesterday's unexpectedly high reading on the producer price index reinforces concerns about diminishing disinflationary progress and highlights the necessity for a cautious approach to 2025's monetary policy." As for bond markets, the US 10-year yield rose by 7.3 basis points to reach 4.4% on Friday, while the two-year yield increased by 6.1 basis points to 4.25%. In the corporate sphere, shares of Under Armour experienced a drop of 8.1%.
Although the sportswear brand's turnaround efforts seem promising, Truist Securities mentioned that clarity regarding the company's future growth remains limited at this time. The company held an investor meeting on Thursday. Airbnb's stock dropped 4.7%, marking the largest decline in the S&P 500 and the second-steepest on the Nasdaq. On a positive note, Broadcom's shares skyrocketed by 24%, making it the top performer on both the S&P 500 and Nasdaq.
The chipmaker reported robust fiscal fourth-quarter earnings that exceeded expectations, although its revenue slightly missed Wall Street projections. BofA Securities noted that Broadcom is on track for considerable growth over the next three years due to burgeoning opportunities in artificial intelligence and the addition of two major clients. Meanwhile, packaged goods company Post is engaging with investment bankers to evaluate a potential acquisition of frozen fries manufacturer Lamb Weston, which is under pressure from an activist shareholder to initiate a sale, as reported by Reuters.
Following this news, Lamb Weston’s shares surged by 6.8%, securing its position as the second-best performer on the S&P 500, whereas Post’s shares declined by 2.2%. In commodities, West Texas Intermediate crude oil experienced a 1.5% increase, closing at $71.06 per barrel on Friday. RBC Capital Markets highlighted an uptick in risks associated with an Israeli strike on Iran's nuclear facilities, particularly following the abrupt collapse of Bashar Al-Assad's regime in Syria. Gold prices fell by 1.6% to $2,667.30 per troy ounce, while silver decreased by 1.9% to $31.04 per ounce..