© Reuters. FILE PHOTO: The Wall St. sign can be seen near the New York Stock Exchange (NYSE) in New York City, United States on May 4, 2021. REUTERS / Brendan McDermid
By Stephen Culp
NEW YORK (Reuters) – The closing price at the end of a sluggish week was nominally higher, characterized by few market-moving catalysts and ongoing concerns about whether current spikes in inflation could persist and prompt the US Federal Reserve to tighten its cautious policy sooner than expected.
Economically sensitive small caps and transports made solid profits, outperforming the broader market.
For the week, the S&P and Nasdaq rose from last Friday’s close, while the Dow posted a weekly loss.
But the indices were range pegged and there were few catalysts to move investor sentiment. Much of the focus was on Thursday’s consumer price data, which eased nervousness about the duration of the current wave of inflation.
“Today is a muted day,” said Oliver Pursche, senior vice president at Wealthspire Advisors in New York. “Summer is coming, people are dropping out of work early, and there’s nothing on the news that is going to drive the market in one direction significantly.”
“So investors will wait until profit season.”
The Federal Reserve has repeatedly said that short-term price hikes will not translate into permanent inflation, a claim reflected in the University of Michigan Consumer Sentiment Report released Friday, which showed that inflation expectations were lower than last month’s increase.
Investors are now turning their attention to the Fed’s statement at the end of next week’s two-day monetary policy meeting, which will be analyzed following any guidance on the central bank’s schedule for rate hike.
“We continue to believe that inflation data is temporary and that we will be around 2% for the year,” added Pursche.
US Treasury benchmark yields saw their largest weekly decline in nearly a year, dragging the rate-sensitive financial sector in recent sessions.
The Food and Drug Administration is facing increasing criticism for its “accelerated approval” of Biogen Inc’s (NASDAQ 🙂 Alzheimer’s drug Aduhelm, with no clear evidence of its ability to fight the disease.
Biogen stocks ended the session lower along with the broader healthcare sector.
Unofficially, the S&P 500 rose 14.41 points or 0.04% to 34,480.65, the S&P 500 rose 8.29 points or 0.20% to 4,247.47 and gained 49.09 points or 0.35% to 14,069.42.
Healthcare suffered the largest percentage decline among the 11 major sectors in the S&P 500.
Much of the trading volume this week was due to the ongoing social media-fueled “meme-share” phenomenon, with retail investors swarming around heavily shorted stocks.
But Meme stock moves were more subdued on Friday, with AMC Entertainment (NYSE 🙂 outperforming.
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