U.S. stocks opened mostly lower on Friday after capping off a spectacular November for markets, while the Dow saw modest gains that pushed the blue-chip average to a fresh 22-month high.
Now, investors are waiting to hear from Federal Reserve Chairman Jerome Powell, who is set to speak at an event in Atlanta.
What’s happening
- The Dow Jones Industrial Average DJIA was up 59 points, or 0.2%, to 36,018.
- The S&P 500 SPX fell by 5 points, or 0.1%, to 4,562.
- The Nasdaq Composite COMP fell by 51 points, or 0.4.%, to 14,174.
On Thursday, the Dow Jones Industrial Average rose 520 points, or 1.47%, to 35,951 — its highest close in 22 months — while all three major indexes capped off substantial gains for the month of November. The S&P 500 gained 8.9% while the Nasdaq gained 10.7%, the biggest monthly advance for both indexes since July 2022, Dow Jones data show.
What’s driving markets
November was a fantastic month for markets. U.S. stocks saw a broad rally that saw 10 of the S&P 500’s 11 sectors finish in the green, with the energy sector being the lone holdout thanks to the drop in crude-oil prices.
Bonds also rallied, with the yield on the 10-year Treasury note falling 70 basis points BX:TMUBMUSD10Y, the steepest monthly decline since the 2008 global financial crisis, according to Goldman Sachs. The benchmark bond yield stood at 4.342% early Friday, according to FactSet data.
But the rally appeared to take a breather early Friday, as stocks moved mostly lower ahead of comments from Powell, which are due at 11 a.m. Eastern Time.
Expectations for the Fed’s interest-rate cuts to begin as soon as May, or maybe even March, helped send bond yields, which move inversely to prices, lower in November, while pushing stocks higher.
Also, bonds and stocks shot higher after Treasury Secretary Janet Yellen and the Treasury Department revealed that they wouldn’t issue as many long-dated bonds as investors had feared.
“When the market found out it wasn’t going to receive as much duration, basically everything rallied,” Stephen Miran, co-founder of Amberwave Partners, said during an interview with MarketWatch.
Earlier in the week, encouraging inflation data and comments from Fed Gov. Christopher Waller added to hopes for springtime rate cuts.
Investors are now waiting to see if Powell will confirm that the Fed’s thinking is indeed evolving in this direction ahead of the central bank’s upcoming December policy meeting, said Fundstrat’s Tom Lee.
“In my opinion, the evidence seems to point to an easing of inflation faster than expected. And thus, gives them room to walk back their ‘higher for longer’ hawkish tone seen for much of 2023 and the resulting efforts to dampen expectations for moving away from ‘higher for longer’,” Lee said in emailed commentary.
See: Powell won’t endorse market expectations for quick rate cuts
Before the Powell speech, the key Institute for Supply Management’s manufacturing report is due, as automakers release their monthly sales statistics throughout the day.
In terms of economic data, the only notable release on Friday was a barometer of business conditions at American factories. November marked the 13th negative monthly reading in a row, indicating little improvement in the industrial side of the economy.
See: Manufacturers still treading water, ISM survey shows: ‘Demand remains soft.’
There also were several after-hours earnings from the tech space, including from Dell Technologies DELL, -4.34%, Marvell Technology MRVL, -3.68%, Elastic ESTC, +31.10%, Samsara IOT, +16.01%, and UiPath PATH, +23.61%.
Companies in focus
- Tesla Inc. TSLA, -1.42% shares sank following Thursday’s Cybertruck delivery event.
- Gains in shares of Salesforce Inc. CRM, +2.61%, which contributed to much of the Dow’s Thursday gain, continued to climb Friday. The blue-chip gauge was also benefiting from gains in Nike Inc. NKE, +1.22% shares.
- Shares of Fisker Inc. FSR, +5.38% bounced Friday after the electric-vehicle maker said it decided to cut December production to free up more than $ 300 million of liquidity.
- Ulta Beauty Inc.’s stock soared after the beauty company beat third-quarter consensus estimates from its latest earnings report.
- Pfizer Inc. PFE, -4.05% stock tumbled after the company said it would not move to a Phase 3 trial of a twice-daily formulation of a weight-loss drug after patients in an earlier study had a lot of side effects.