Most US stock indexes rose and hit all-time highs during the week, supported by the Federal Reserve’s 3rd consecutive interest rate cut and commentary from central bank officials that some investors interpreted as less hawkish than feared. The small-cap Russell 2000 Index, performed best, adding 1.19%, followed by the Dow Jones Industrial Average’s 1.05% gain. Meanwhile, the S&P 500 Index pulled back sharply on Friday and erased its gains from earlier in the week. Renewed concerns regarding technology stock valuations and questions around whether elevated spending on AI infrastructure will pay off weighed on the Nasdaq Composite index, which fell 1.62% over the week. These concerns came back in to focus after Oracle, which has been a recent beneficiary of AI enthusiasm, announced quarterly revenue results that fell short of consensus estimates on Wednesday, while the company also guided for a substantial increase in capital expenditures. The Federal Reserve concluded its final meeting of the year on Wednesday and, as was widely expected, announced that it would lower its target range for the federal funds rate by 25 basis points (0.25 percentage point) to the 3.50%–3.75% range. On the macro side, US jobless claims jump while job openings inch higher. Jobless claims jump; job openings inch higher. Outside the US, the pan-European STOXX Europe 600 Index ended slightly lower. Japan’s stock markets rose over the week, with the Nikkei Index gaining 0.68%. Gold topped $4300 before being sold on Thursday.
Have a great weekend.
Charles & Syz Research Lab