Stocks Show Modest Gain as Fed Signals Possible Delay in Interest Rate Hike
Friday saw a slight increase in stocks, as the Nasdaq rebounded from a slump driven by Apple’s recent performance. The Federal Reserve’s potential decision to hold off on raising interest rates in September was the primary catalyst for the market’s upward trend.
The S&P 500 and the Dow Jones Industrial Average both experienced modest gains of around 0.1% and 0.2%, respectively. The Nasdaq Composite also saw a slight uptick of approximately 0.1%, as Apple’s shares recovered from a two-day slump that negatively impacted the tech sector.
Despite these gains, all three indexes closed the week with losses.
Investors closely analyzed comments from various Federal Reserve policymakers that hinted at a possible delay in further rate hikes for the rest of the year. This sentiment was strengthened by Federal Reserve Bank of New York President John Williams, who stated that US monetary policy is currently “in a good place.” However, he emphasized that economic data would ultimately guide officials’ decisions.
Of particular concern to the Fed is inflation data, which will heavily influence its decision on interest rates. Rising energy prices, along with a strike at Chevron’s natural gas plants in Australia, which accounts for over 5% of global LNG supply, contributed to a surge in European gas futures on Friday. The recent increase in oil prices has also raised apprehension among investors.
Apple shares experienced significant downturns throughout the week due to reports of Chinese restrictions on the use of iPhones by government officials and state companies. This sent shockwaves through the market, resulting in a decrease of nearly $200 billion in the company’s market value. While Apple stock recovered slightly on Friday, gaining approximately 0.4%, it still suffered a weekly loss of around 6%.
Some analysts believe that the stock’s downward spiral may continue, as Apple is set to release its next iPhone model in the coming days. In addition, Samsung is positioning its new Galaxy foldable smartphones as strong competitors to the iPhone, adding further pressure on Apple’s market share.
Overall, Friday’s gains provide a momentary reprieve for investors, but the market remains cautious as it awaits a clearer indication of the Federal Reserve’s decision on interest rates.
For more detailed analysis and the latest stock market news, click here.
Read the latest financial and business news from Yahoo Finance here.