4:18pm: Uncertainty and volatility have become the norm
The Dow closed Friday up 76 points, 0.2%, at 34,577, the Nasdaq Composite added 13 points, less than 0.1%, to 13,762 and the S&P 500 improved 6 points, 0.1%, to 4,457. The small-cap Russell 2000 index slid 4 points, 0.2%, to 1,851.
The S&P 500 broke a three-session losing streak but it wasn't enough to prevent a losing week overall.
This week, investors grappled with lower-than-expected initial jobless claims that reignighted fears that the Federal Reserve will implement more rate hikes.
That, paired with a relatively strong earnings season, has created a choppy, volatile market.
“Right now, we’re in that strange phase where good news can be bad news, but I don’t think that lasts too long,” Yung-Yu Ma, the chief investment strategist at BMO Wealth management, said.
12:05pm: Wall Street on track for losing week
US stocks were higher in noon trading after a few Fed policymakers hinted the Federal Reserve could pause hiking interest rates at its meeting in September.
At midday, the Dow gained 64 points to 34,565, while the S&P 500 added 12 points at 4,463 and the tech-heavy Nasdaq rose 48 points to 13,797.
“If it looks like we’re going to avoid the hard landing, we get some good economic news, and there’s a sigh of relief quickly followed up by an increased expectation of Fed rate increases,” Sit Investment Associates portfolio manager Bryce Doty said.
Notable movers included shares of RH (NYSE:RH), which slid 14% after the home goods retailer’s CEO warned of a challenging environment ahead.
9:40am: Tech rally leads US stocks higher
US stocks rallied in early exchanges as tech bounced recovered their poise after heavy falls on Thursday.
Shortly after the opening bell, the Dow Jones Industrial Average was up 23.68 points, 0.1%, at 34,524.41, the S&P 500 was up 9.81 points, 0.2%, at 4,460.95 and the Nasdaq Composite was up 57.05 points, 0.4%, at 13,805.89.
Apple recovered some its lost, gaining 1.0% while but another of yesterday's big fallers Qualcomm edged lower once more.
But, strategists at Barclays questioned whether markets can push much higher.
“While the S&P 500 equity risk premium was already low for most of 2023, the latest leg of the rally has caused the ERP to fall below IG credit spreads, raising the question of whether equity investors are willing to continue chasing growth at any cost,” the bank said.
“Absent a broad-based recovery in earnings estimates, we doubt that valuation expansion can continue driving equity market upside at these levels,” it added.
In company news, Kroger fell 1.6% after agreeing to pay $1.2 billion to US states, local governments and Native American tribes to settle the majority of claims that it fueled the opioid epidemic through lax oversight of its pill sales.
That settlement would allow for “full resolution” of all claims on behalf of those parties, Kroger said in a release ahead of its second-quarter earnings. Still, the company said the settlement is not an admission of wrongdoing or liability.
“Kroger will continue to vigorously defend against any other claims and lawsuits relating to opioids that the final agreement does not resolve,” the company said in the release.
7:00am: US stocks expected to edge lower
US stocks are expected to creep lower when trading opens on Friday on rising tensions between the US and China while investors also mull the possibility of a further rate increase following a batch of robust economic data this week.
In pre-market trading, futures for the Dow Jones Industrial Average were 0.1% lower, while those for the S&P 500 fell 0.1%, and contracts for the Nasdaq 100 futures were down 0.1%.
Apple recovered its poise, to trade 0.1% higher in pre-market trading, after a two-day fall which saw close to $200 million wipred off its market value.
Reports that China could limit the usage of iPhones sparked the falls highlighting the ongoing friction between he companies over access to technology.
Neil Wilson at markets.com is “not convinced a full bazooka is on the cards – for instance an outright Apple product ban doesn’t seems very unlikely.”
“It’s no coincidence that Huawei is back with a new flagship device just before Apple launches the iPhone 15 – Beijing will be happy to let rumours do the rounds to nudge consumers into buying China not America,” he said.
“However, we can also see it peRH (NYSE:RH)aps through the lens of the broader tit-for-tat between the US and China, so won’t necessarily be forgotten soon and it will not be immaterial in terms of sales for Apple,” he added.
The reports sent Apple shares down 2.9% on Thursday while Qualcomm,a big supplier to Apple, fell 6.6%.
Elsewhere, Michael Barr, the Federal Reserve’s vice-chair for supervision, will speak about payments innovation at the Philadelphia Fed’s annual fintech conference.