On Friday, US stocks mostly hovered below the flatline as a tech-led rally began to show signs of fatigue for the first time in over a week.
The benchmark S&P 500 (^GSPC) dropped by about 0.1%, while the tech-heavy Nasdaq Composite (^IXIC) fell by 0.2%. In contrast, the Dow Jones Industrial Average (^DJI) managed a rise of close to 0.2%.
Thursday’s dip in the S&P 500 and Nasdaq was notable mainly because it broke a positive trend seen in recent weeks. The S&P had been surging, briefly crossing the 5,500 mark for the first time on Thursday. However, the Nasdaq ended a streak of seven consecutive record closes with its loss in the prior session.
The recent rally, driven by enthusiasm for AI and spearheaded by Nvidia (NASDAQ:NVDA), showed signs of slowing down. Nvidia, which briefly became the world’s most valuable company this week, saw a significant loss on Thursday and was down more than 2% in Friday morning trading. Other chip stocks, including Broadcom (NASDAQ:AVGO), Super Micro Computer (NASDAQ:SMCI), and Qualcomm (NASDAQ:QCOM), also fell alongside Nvidia in early trading.
Investors are also evaluating the broader health of the US economy and the future direction of interest rates. Former St. Louis Fed president James Bullard, known for his stance on inflation, said Thursday that last week’s lower Consumer Price Index reading could lead to a rate cut in September. According to the CME FedWatch tool, around two-thirds of traders still anticipate rate cuts beginning then.
On the macroeconomic front, an initial read on US economic activity from S&P Global is expected to be released Friday morning.
Featured Image: Megapixl © Alexandersikov
