On Friday, the stock market demonstrated a lack of consistent direction throughout the trading session. This phenomenon was observed as major market indicators oscillated repeatedly across the unchanged line, following a positive trend over the previous few sessions.
Presently, these major market indicators are showing varied results. The Dow Jones has risen by 41.82 points, or 0.1 percent, to stand at 38,090.95. On the other hand, the Nasdaq has decreased by 48.05 points, or 0.3 percent, to 15,462.09, while the S&P 500 has dipped by 4.74 points or 0.1 percent, to 4,889.42.
Traders on Wall Street have exhibited indecision, as they attempt to balance the disappointing earnings report from semiconductor giant Intel (INTC) against the more restrained-than-anticipated consumer price inflation data.
Intel stocks have seen a 12.1 percent decline after the company's better-than-expected results for the fourth quarter were offset by an underwhelming outlook for the first quarter earnings.
Concurrently, before trading commenced, the Commerce Department released a report highlighting a larger-than-expected decrease in the annual core consumer price growth rate for December.
The said report stated that the year-over-year growth of core consumer prices, which exclude food and energy prices, had reduced to 2.9 percent in December, down from 3.2 percent in November. This was a more significant decline than economists had predicted, who projected a slowdown to 3.0 percent.
This annual inflation data, widely considered the Federal Reserve's preferred metric, was included in the Commerce Department's monthly overview of personal income and expenditure.
Larry Tentarelli, Chief Technical Strategist at Blue Chip Daily Trend Report, commented, "The latest inflation report provides the Federal Reserve an opportunity to lower interest rates. Our forecast, based on recent robust data on GDP and employment, anticipates the first rate cut to occur around May or June."
He also noted, "Should employment or economic data show signs of softening and inflation continues to decrease rapidly, we may see a higher likelihood of a rate reduction in March. However, it is not our base case scenario at the moment."
Traders may also be hesitating to execute substantial transactions in anticipation of the Federal Reserve's monetary policy announcement next week. Although it is widely believed that the Fed will maintain interest rates, traders will be seeking any indications regarding the scheduling of potential rate cuts.
Looking at sector-specific news, most of the major sectors show slight activity, leading to the overall subdued performance of the broader markets. Following a significant drop by Intel, semiconductor stocks have sharply declined, with the Philadelphia Semiconductor Index falling by 2.8 percent.
Additionally, KLA Corp. (KLAC) stocks witnessed a downturn after the semiconductor equipment company revealed favourable second-quarter fiscal results, but projected a disappointing outlook for the third quarter.
Airline stocks also trended downwards, while telecom and steel stocks exhibited some gains.
Turning towards international markets, Asian Pacific stock markets demonstrated mixed results on Friday. Japan's Nikkei 225 Index experienced a fall of 1.3 percent. In contrast, China's Shanghai Composite Index saw a marginal rise of 0.1 percent, while South Korea's Kospi increased by 0.3 percent.
In Europe, all major markets showed positive movement. The French CAC 40 Index surged by a significant 2.3 percent, the U.K.'s FTSE 100 Index leapt by 1.4 percent, and the German DAX Index ascended by 0.3 percent.
Moving on to the bond market, treasury bonds saw a slight downtrend after early volatility. As a result, the yield on the benchmark ten-year note increased by 1.9 basis points to reach 4.151 percent, thereby demonstrating an inverse relationship with its price.
