Stocks were in mixed territory Friday, with the Dow pulling back slightly even as the prospect of deeper and earlier interest-rate cuts continued to buoy Wall Street’s spirits.
The Dow Jones Industrial Average (^DJI) ticked down 0.2%, or about 70 points, after the blue-chip index closed at a fresh all-time high Thursday. The S&P 500 (^GSPC) was virtually unchanged, while the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.
Markets rejoiced after the Federal Reserve’s surprise shift in tone to dovish this week, as it signaled more rate cuts in 2024 and acknowledged its anti-inflation campaign is gaining traction. That has helped drive a record-setting rally in US stocks, and the major indexes have posted six winning sessions in a row.
But the ebullient mood may start to fade, as some observers caution that markets could be getting ahead of themselves. New York Fed President John Williams told CNBC in an interview Friday that talk of rate cuts is “premature.” And in contrast to the Fed’s recent signaling, central banks in Europe discouraged hopes for an easing of policy.
Meanwhile, some $5 trillion in US stock options are set to expire on Friday, 80% in S&P 500-linked contracts. The largest such expiration in at least 20 years could keep a lid on any pullback, some analysts believe.
Elsewhere, oil ticked higher, on track for its first weekly win since October and boosted by a Fed-fueled fall in the dollar. West Texas Intermediate (CL=F) futures traded at almost $72 a barrel, while Brent crude futures (BZ=F) changed hands at about $77 a barrel, after rising more than 4% in the previous two sessions.