In a session marked by indecisiveness, stock markets exhibited a lack of clear direction on Friday. Major indices oscillated across the neutral line throughout the day.
By the end of Friday’s trading, the major averages closed with little change. The Dow Jones Industrial Average edged up 15.57 points, or less than 0.1%, to close at 39,150.33. Conversely, the Nasdaq Composite dipped 32.23 points, or 0.2%, to 17,689.36, and the S&P 500 declined 8.55 points, or 0.2%, to 5,464.62.
For the abbreviated trading week due to the holiday, the Dow increased by 1.5%, and the S&P 500 rose by 0.6%, while the Nasdaq remained nearly flat.
The erratic behavior on Wall Street was attributed to traders stepping back to evaluate recent market activities. On Thursday, both the Nasdaq and the S&P 500 had hit new intraday highs before reversing direction. Meanwhile, the narrower Dow saw gains during Thursday's trading, which extended into Friday, pushing the blue-chip index to its highest closing level in a month.
Investors closely monitored Nvidia (NVDA), a pivotal player in AI that has significantly influenced market movements recently. Nvidia's stock dropped 3.5% on Tuesday and fell another 3.2% on Friday, following its brief stint surpassing Microsoft (MSFT) as the most valuable public company globally on Tuesday.
On the economic front, a report from the National Association of Realtors indicated that U.S. existing home sales decreased in May, aligning closely with economist expectations. Existing home sales fell 0.7% to an annual rate of 4.11 million, following a 1.9% decline to 4.14 million in the previous month. Economists had anticipated a drop to an annual rate of 4.10 million.
The downturn in existing home sales occurred as the median price for existing homes soared to a record high of $419,300 in May, marking a 5.8% increase from $396,500 the previous year. Lawrence Yun, Chief Economist at NAR, noted, “Home prices reaching new highs are creating a wider divide between those owning properties and those who wish to be first-time buyers. The mortgage payment for a typical home today is more than double that of homes purchased before 2020. Still, first-time buyers in the market understand the long-term benefits of owning.”
Additionally, the Conference Board released data showing that its leading U.S. economic index fell more than anticipated in May. The index dropped 0.5% following a 0.6% decrease in April, against economists' expectations of a 0.3% decline.
**Sector Performance**
Reflecting the overall tepid market performance, most major sectors registered only modest movements. Gold stocks experienced a significant decline, causing the NYSE Arca Gold Bugs Index to drop by 1.4%, driven by a sharp pullback in gold prices.
Semiconductor stocks also showed noticeable weakness, with the Philadelphia Semiconductor Index falling by 1.3%.
Conversely, networking stocks rallied strongly, pushing the NYSE Arca Networking Index up by 1.2%.
**Global Markets**
In international trading, stocks across the Asia-Pacific region mostly moved lower on Friday. Japan’s Nikkei 225 Index inched down by 0.1%, China’s Shanghai Composite Index declined by 0.2%, and Hong Kong’s Hang Seng Index dropped by 1.7%.
European markets also trended downward. France's CAC 40 Index slipped by 0.6%, Germany's DAX Index fell by 0.5%, and the UK’s FTSE 100 Index decreased by 0.4%.
**Bond Market**
In the bond market, U.S. Treasuries showed ambivalence throughout the session before closing nearly unchanged. The yield on the benchmark ten-year note, which moves inversely to its price, edged up by less than a basis point to 4.257%.
**Looking Ahead**
Next week, attention will turn to the Commerce Department’s report on personal income and spending, as it includes inflation indicators closely watched by the Federal Reserve. Reports on new home sales, consumer confidence, durable goods orders, and pending home sales are also expected to garner interest.
