U.S. stocks closed out the week with notable gains, as Wall Street achieved new record highs. The S&P 500 rose marginally by less than 0.1% on Friday, marking its seventh winning week in the last nine. The Dow Jones Industrial Average advanced by 0.5%, both indices adding to the all-time highs set just a day earlier. Conversely, the Nasdaq Composite experienced a slight dip, falling 0.3% from its own record.
In the bond market, Treasury yields increased following mixed reports regarding growth in the U.S. services sector. Crude oil prices also saw an uptick as they began to recover from significant losses earlier in the week.
Market Activity and Economic Indicators
As the week progressed, U.S. stocks appeared poised for another weekly gain, hovering near the previous day’s records. By 14:55 Eastern Time, the S&P 500 had climbed 0.1%, while the Dow Jones Industrial Average enjoyed a substantial increase of 298 points, or 0.7%. However, the Nasdaq Composite surrendered its early gains, reflecting a 0.3% decline.
Reports from the Institute for Supply Management indicated stalling growth in activity, while another from S&P Global suggested continued, albeit slow, expansion in the sector. Typically, the first Friday of each month draws attention to the U.S. government’s jobs report, which details job creation, destruction, and unemployment rates. This month’s release is particularly significant as traders closely watch for signs that might influence the Federal Reserve to adjust interest rates.
Currently, a U.S. government shutdown, now in its third day, is delaying the jobs report. Historically, such shutdowns have had minimal impact on the economy or stock markets, leading many to speculate that this instance may follow suit, despite concerns raised by President Donald Trump regarding potential layoffs of federal workers.
Sector Highlights and Future Concerns
Amid these developments, enthusiasm surrounding artificial intelligence continues to propel the market. The industry received a boost after Hitachi signed a memorandum of understanding with OpenAI, aimed at enhancing AI capabilities. Following this announcement, Hitachi’s stock surged 10.3% in Tokyo. However, growing investment in AI has sparked concerns over a potential market bubble, prompting caution among investors.
On the downside, Applied Materials experienced a 2.3% drop after announcing an anticipated revenue hit of approximately $110 million in the fourth quarter due to new export restrictions imposed by the U.S. Commerce Department on certain customers in China. In contrast, oil producers benefited from a rebound in crude prices, alleviating some fears regarding high inventory levels. Exxon Mobil rose 2%, contributing to the gains in the S&P 500.
Internationally, stock indexes showed mixed performance across Europe and Asia. Japan’s Nikkei 225 was among the top performers, rising 1.9%, aided by Hitachi’s impressive stock jump. In the bond market, the yield on the 10-year Treasury increased to 4.12%, up from 4.10% late Thursday.
As Wall Street continues to navigate these dynamic developments, the interplay of economic indicators, government actions, and sector-specific trends will remain crucial in shaping market trajectories.
