Stock Market Steadies Near Record High
As the week comes to a close, the US stock market is holding steady near its all-time high, driven by a combination of factors. The S&P 500 is virtually flat, while the Dow Jones Industrial Average is down slightly, and the Nasdaq composite is unchanged.
Bond Market Calm
A relatively stable bond market has helped keep the stock market calm, as Treasury yields have eased following encouraging updates on inflation. This has allowed stock prices to rise, despite concerns about the US government’s growing debt.
Earnings Season Off to a Good Start
The earnings reporting season for big US companies has gotten off to a strong start, with many companies delivering bigger profits. This has helped prop up the stock market, even as higher Treasury yields put downward pressure on stock prices.
Company Performance
Some companies have seen their stock prices fall despite reporting strong profits. Texas Instruments, for example, fell 6.2% after reporting profit that topped analysts’ expectations, but analysts focused on discouraging signals about the company’s revenue growth. CSX also fell 2.8% despite matching analysts’ expectations, due to concerns about its revenue growth.
Winners and Losers
On the other hand, Novo Nordisk’s US-listed shares jumped 7.6% after the company reported positive results from a clinical trial of a treatment for people who are overweight or obese. NextEra Energy climbed 5.2% after reporting profit that was slightly above expectations, and Verizon Communications rose 1.2% after delivering results that edged past analysts’ expectations.
Bond Market Update
In the bond market, the yield on the 10-year Treasury eased to 4.61% from 4.65% late Thursday, following reports on the US economy that came in worse than expected. Other yields also pulled lower, as sentiment among US consumers weakened and business activity slowed.
Global Markets
In stock markets abroad, indexes were mixed across Europe and Asia. Tokyo’s Nikkei 225 edged down by 0.1% after the Bank of Japan raised its benchmark interest rate to about 0.5% from 0.25%. Stocks jumped 1.9% in Hong Kong and 0.7% in Shanghai for some of the bigger moves in global markets.
Federal Reserve Meeting
Traders don’t expect the weak data to push the Federal Reserve to cut its main interest rate at its meeting next week. They’re virtually certain it will hold steady, according to data from CME Group. If they’re correct, it would be the first meeting since September where the Fed hasn’t lowered the federal funds rate to take pressure off the US economy.
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