“Market Reacts to Fed’s Inflation Data and Trump’s Debate Performance: What’s Driving Wall Street on Friday?”

Wall Street Falters Despite Drops In Fed’s Favorite Inflation Rate; Energy Stocks, Yields Rise On Trump’s Debate Performance: What’s Driving Markets Friday?

Wall Street saw a lackluster session during midday trading in New York, with major indices edging slightly lower despite positive inflation data. In May 2024, the Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s key measure of inflation, fell to its lowest level since March 2021, aligning with economists’ predictions. This decrease in inflation suggests that price pressures are moving closer to the Fed’s 2% target, potentially paving the way for interest rate cuts.

However, market reactions were cautious, possibly due to investors evaluating the political and economic implications of the first presidential debate between President Joe Biden and former President Donald Trump. Political analysts indicated a significant win for Trump, leading to uncertainty in the markets.

Energy stocks were the top performers among S&P 500 sectors on Friday, despite no concurrent gains in oil and gas prices. This performance could be attributed to rising chances of Trump’s return to the White House. Treasury yields rose across the curve, as the bond market priced in potential expansionary fiscal policies under the next president. The iShares Treasury Bond ETF (TLT) fell by 1.3%.

Semiconductors faced their second consecutive week of losses, while regional banks shined, with the SPDR S&P Regional Banking ETF (KRE) potentially marking its best weekly performance since the beginning of the year. Major commodities remained relatively unchanged, with gold flat and oil down by 0.5%. Bitcoin (BTC) hovered around the $60,500 mark, down by 1.5%.

In terms of major US indices and ETFs, the Russell 2000, Dow Jones, S&P 500, and Nasdaq 100 showed mixed performance. The SPDR S&P 500 ETF Trust (SPY), SPDR Dow Jones Industrial Average (DIA), and Invesco QQQ Trust (QQQ) experienced slight declines.

Stock movers on Friday included Nike Inc. (NKE), which tumbled 20% after missing revenue estimates, and Petco Health & Wellness Company Inc. (WOOF), which rallied over 13% after a social media post by Keith Gill. Baker Hughes Company (BKR) rose 2.3%, while First Solar Inc. (FSLR) fell over 9% in reaction to the presidential debate.

Overall, the market’s response to the inflation data and the debate outcome has been mixed, with various sectors and stocks experiencing volatility. Investors are closely monitoring political developments and economic indicators to navigate the current market environment.

This article was originally published on Benzinga.com and does not provide investment advice. All rights reserved.