US equity markets wrapped up the week on a mixed note Friday, with tech stocks once again in the spotlight. The Nasdaq Composite climbed 0.44% to 22,141, marking another record close as investors looked ahead to potential Federal Reserve rate cuts later this year.
In contrast, the Dow Jones Industrial Average slipped 0.59% to 45,834, while the S&P 500 edged down just 0.05% to 6,584. The divergence highlights how growth-driven tech continues to outperform, even as broader markets remain cautious.
Treasury Yields and Dollar Steady
Bond markets saw modest moves heading into the weekend. The 2-year Treasury yield rose 1.4bps to 3.556%, while the 10-year yield gained 4.4bps to 4.064%. The US dollar index was little changed, finishing the week 0.09% higher at 97.62, reflecting investor indecision ahead of a critical week for global central banks.
Commodities Firm on Geopolitical Tensions
Commodities markets were better bid:
- Brent crude oil gained 0.93% to $66.99
- WTI crude oil rose 0.51% to $62.69
The moves came after reports of another Ukrainian drone strike on Russian energy facilities. Meanwhile, gold prices advanced 0.24% to $3,643.14 an ounce, as safe-haven demand remained intact.
Central Banks in Focus
The upcoming week is set to be dominated by monetary policy decisions:
- Federal Reserve (Wednesday): Markets expect a 25bp rate cut, with attention on Powell’s tone for future easing.
- Bank of Canada (Wednesday): Likely to mirror the Fed with a quarter-point cut.
- Bank of England & Bank of Japan (later in week): Both expected to hold, though forward guidance could trigger volatility.
FX traders will be closely monitoring interest rate differentials, as policy divergence among major central banks often sparks sharp currency swings.
Lively Start to the Week
The macro calendar kicks off with a busy Monday session:
- Asia: Japan closed for holiday, but China’s Industrial Production (+5.7% y/y expected) and Retail Sales (+3.8% y/y expected) will be closely watched.
- Europe: Limited data, though ECB President Christine Lagarde’s speech may provide insights into policy outlook.
- US: The Empire State Manufacturing Index (forecast 4.3) is the lone release, though positioning ahead of the Fed could drive market moves.
With liquidity set to pick up, traders are bracing for early-week volatility that may set the tone for what promises to be an eventful trading week.
Key Takeaways
- Nasdaq leads gains as tech momentum continues.
- Fed, BoC, BoE, and BoJ take center stage in the coming days.
- Oil and gold prices firm amid geopolitical and safe-haven flows.
- Investors remain cautious ahead of a potentially market-moving week.
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