U.S. stocks opened higher on Friday as investors neared the end of a tumultuous trading week marked by mixed retail earnings and a chorus of hawkish Fedspeak.
S&P 500 (^ GSPC) rose 0.8%, while the Dow Jones Industrial Average (^ DJI) added 250 points or 0.7%. The tech-heavy Nasdaq Composite (^IXICincreased by 0.9%. Treasury yields continued their climb, with the benchmark 10-year benchmark returning above 3.8% and the rate-sensitive 2-year yield heading toward 4.5%.
A meeting of central bank officials on Thursday pushed back against speculation that a pause in monetary tightening was imminent. After a quick rise fueled by soft inflation data, comments made in individual engagements across the country rattled stocks and bonds.
Inflation is recent Mild symptoms are shownwith consumers and Producer price data A pullback in October but still stubbornly higher. Meanwhile, the U.S Retail sales rose very rapidly Eight months into the same period, it prompted policymakers to send tough messages about the work that still needs to be done to reduce soaring costs.
Minneapolis Federal Reserve Bank President Neil Kashkari said in a webcast of a Minnesota Chamber of Commerce event that policymakers expect to raise their key federal funds rate. remains an open question.” It was only after that that his comments came out St. Louis Fed President James Bullard and San Francisco Fed President Mary Daly each said the central bank was looking at a terminal rate of up to 5.25%.
“Fed Chair Powell revised monetary policy by adopting a new ‘velocity vs. target’ paradigm at the November FOMC meeting — implying an intention to achieve a higher terminal fed funds rate while doing so at a slower pace,” EY Parthenon chief economist Gregory Dago said in a note. “The central bank’s difficulty will be to prevent excessive and counter-productive easing of financial conditions in the face of weaker-than-expected inflation.”
Goldman Sachs Group also on Thursday The Federal Reserve raised its forecast for the terminal rate From 5% to 5.25%, another 25-basis-point hike in May and a half-percentage-point hike in December could follow similar increases in February and March.
“Inflation will remain uncomfortably high for a while, and this could put pressure on the FOMC to deliver smaller hikes next year,” economists led by John Hutchius also said.
In the shadow of renewed rate shocks, the interval (GPS), Ross Stores (Roast), and Williams-Sonoma (WSM) capped off a busy week of retail returns.
Shares of Interval rose 9% on Friday morning after the company Published the top results Wall Street Ratings. However, Chief Financial Officer Katrina O’Connell stressed that the macroeconomic environment remains challenging but that the gap will take a “prudent approach in light of consumer uncertainty”.
Ross Stores shares rose 16% since then The retail chain beat earnings forecasts It raised its fourth-quarter guidance, citing sales momentum and improved assortments for the holidays.
Meanwhile, shares of home furnishings retailer Williams Sonoma fell nearly 9%. It pulled its guidance to 2024 On “macro uncertainty”.
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Alexandra Semenova is a Yahoo Finance reporter. Follow her on Twitter @alexandraandnyc
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