Major averages rose in afternoon trade on Friday as investors weighed the tough language from Federal Reserve speakers and scrutinized the latest earnings report.
The Dow Jones industrial average rose 199.37 points, or 0.59%, to 33,745.69, while the S&P 500 rose 0.48% to 3,965.34. The Nasdaq Composite ended 0.01% above the flat line at 11,146.06.
All major averages posted losses for the week. The Dow ended down 0.01%. The S&P 500 lost 0.69% for the week, while the Nasdaq fell 1.57%. However, all three indices are positive for the month.
The S&P 500 traded mostly flat, with the market divided throughout the day as investors began to reset expectations after two rallies in the past week, starting with the October CPI print. Stephanie Long, chief investment officer at Homrich Berg, said the week was characterized by a “back-to-reality outlook.”
“Following the big rally from the better-than-expected CPI print, the market is digesting the current data, which is bringing things back to reality,” he said. “We don’t think the rally after the CBI print was justified by the fundamentals… The market is pricing in a soft landing here, which we think is unlikely to happen. So when you hear central bank officials coming out and reiterating their position, you start to adjust the market to that. “
On Friday, Boston Federal Reserve President Susan Collins expressed confidence that policymakers can control inflation without causing too much damage to employment.
St. Louis Federal Reserve President James Bullard said Thursday That “The policy rate is still not in the zone of being considered sufficiently constrained.” He suggested that the appropriate zone for the federal funds rate might be in the 5% to 7% range, which would be above the market price.
“We continue to think that investors should pay more attention to the real data and more to the Fed rhetoric. Core knowledge. “Investors are tired of fighting the Fed’s daily tape bombs, and 2-3 more CPIs to stop the officials advising every time they try to rally the market. may be required.”