The Nasdaq also ended the week with losses, though both it and the S&P500 were hovering near 14-month highs after economic data this week pointed to a cooling in inflation, overshadowing concerns about further rate hikes.
The Industrial Average Dow Jones fell 0.3% to 34,301.36 units; the S&P 500 index lost 0.4% and ended the session at 4,409.84 units; and the Nasdaq Composite fell 0.7% to 13,689.57 units.
After holding rates steady on Wednesday, the US central bank signaled borrowing costs could rise as much as half a percentage point by the end of the year, but traders have priced in only one more 25 basis point rate hike expected in July, according to the CME Group’s Fedwatch tool.
On Friday, Fed officials tried to cool that optimism. Fed Governor Christopher Waller warned that “core inflation is not coming down as I thought” Richmond Federal Reserve Chairman Thomas Barkin was “comfortable” with further rate hikes as inflation it has not yet returned to the path of the 2%.
“I think the Fed will continue to dampen the market’s enthusiasm and say, ‘No, we plan to go up two more times, but of course we’re dependent on the data,'” said CFRA Research chief investment strategist Sam Stovall.
The fall of Microsoft Corp weighed on the S&P500 and the Nasdaq. Shares of the technology company had closed on Thursday at their highest level in history.
US stock markets will be closed Monday for the Juneteenth holiday.
Source: Ambito
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