Major averages rose in the afternoon on Friday, ending the day on an upbeat note as investors assessed tougher language from Fed speakers and pondered recent earnings reports.
The Dow Jones Industrial Average rose 199.37 points, or 0.59%, to 33,745.69, while the S&P 500 rose 0.48%, to 3,965.34. The Nasdaq Composite finished just 0.01% above the flat line at 11,146.06.
All major averages posted losses this week. The Dow Jones closed down 0.01%. The S&P 500 lost 0.69% for the week, while the Nasdaq ended 1.57% lower. All three indicators are positive for this month.
The market split most of the day, with the S&P 500 trading mostly flat as investors began to readjust expectations after two hikes over the past week, starting with the October CPI reading. Stephanie Lang, chief investment officer at Homerich Berg, said this week is marked by a “back-to-reality view.”
She said, “After the surge resulting from the better-than-expected CPI reading, the market digests the current data, bringing things back to reality.” “The rally that followed the CPI reading which we don’t feel was justified by fundamentals…and the market rates are also in a soft landing here, which we don’t think is likely to happen. So when you hear Fed officials come out and reiterate their stance, you’re starting to Seeing the market adapt to that.”
On Friday, Boston Fed Chair Susan Collins expressed confidence that policymakers can tame inflation without doing too much harm to employment.
St. Louis Federal Reserve Chairman James Bullard Thursday said that “The policy rate is not yet in an area that can be considered sufficiently restrictive.” He noted that the appropriate area for the federal funds rate could be in the 5% to 7% range, which is above market pricing.
said Adam Crisavoli, founder of BioKnowledge. “However, investors are tired of fighting the Fed’s daily tape bombs and the fear is that it may take another 2-3 CPIs for officials to stop blaming the market every time it tries to rally.”
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