The Wall Street closed the week on a mixed note, with investors reacting to softer inflation data and a more cautious Federal Reserve (Fed) policy outlook. The S&P 500 and Dow Jones Industrial Average posted modest losses, while the Nasdaq Composite extended its winning streak, buoyed by strength in heavyweight tech stocks.
The S&P 500 slipped 0.3%, the Dow Jones fell 0.5%, while the Nasdaq Composite edged up 0.2%, marking its fifth consecutive weekly gain.
The week’s market movements were largely shaped by the Fed’s decision on June 11 to maintain its benchmark interest rate while lowering its forecast for 2025 rate cuts from three to just one. Fed Chair Jerome Powell noted that more evidence is needed to confirm that inflation is sustainably declining.
Meanwhile, the May’s Consumer Price Index showed headline inflation easing slightly more than expected, briefly lifting market sentiment midweek. However, persistent core inflation and reduced expectations for monetary easing weighed on broader equity momentum.
Tech stocks once again provided a cushion, with Nvidia, Microsoft and Apple leading gains as investor confidence in artificial intelligence-related growth remained strong. The Nasdaq’s resilience underscored investor preference for growth sectors amid interest rate uncertainty.
In contrast, cyclical sectors such as financials, industrials and energy underperformed. Banks retreated as prospects for higher-for-longer interest rates weighed on loan growth expectations, while oil prices slipped, dragging energy shares lower.
Looking ahead, investors will focus on upcoming US retail sales and jobless claims data for further insight into consumer spending and labour market trends. With monetary policy still in focus, analysts expect continued volatility and sector-specific rotation in the weeks ahead.
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