A record-breaking week on Wall Street ended on a calmer note on Friday, with U.S. stocks hitting new highs a day earlier amid a global rally.
The Standard & Poor’s 500 lost a record 0.2% and the Nasdaq composite lost 0.4%. Meanwhile, the Dow Jones industrial average rose 0.1% to hit a record high.
FedEx dragged the market down 15.2% after its earnings and revenue missed analysts’ expectations in the latest quarter. It said U.S. customers were sending fewer packages via priority services, while it had to deal with higher wages for workers and other costs. FedEx also lowered its revenue growth forecast for its fiscal year.
Nike helped limit losses for the stock, which rose 6.8% after naming Elliott Hill as chief executive. Hill, 60, spent more than three decades at Nike in a variety of leadership roles before retiring in 2020.
Constellation Energy jumped 22.3% after announcing it would restart the Three Mile Island nuclear power plant and sell its power to Microsoft.
Shares of Trump Media & Technology Group fell 7.8% after its largest shareholder, former President Trump, was given the freedom to sell his shares if he wanted.
Trump owns more than half of the $2.7 billion company behind the Truth Social platform. But Trump and others at the company were unable to receive their payment because a “lock-up agreement” prevented them from selling any of their shares. Before the deadline, Trump said he was in no rush to sell.
TMTG stock fell from $60 in March to $14 and went on a roller coaster ride. Over the past six months, the stock has often risen or fallen at least 5% per day.
Homebuilder Lennar fell 5.3% after reporting mixed earnings. Its profit in the latest quarter beat expectations. But it also said it made less profit per $100 in home sales, and that margin is expected to remain flat in the current quarter.
However, conditions may improve for homebuilders. The Federal Reserve cut its key interest rate this week for the first time in more than four years, and is likely to do so. This could make mortgages more affordable for homebuyers.
The cut closed the door on a period in which the Federal Reserve kept key interest rates at two-decade highs, hoping to slow the U.S. economy enough to stave off inflation. Now that inflation has fallen from its peak two summers ago, Chairman Jerome H. Powell said the Fed could focus more on keeping the labor market stable and out of recession.
The Federal Reserve is still under pressure as hiring has begun to slow under the weight of higher interest rates. Some critics say the central bank waited too long to cut prices and may hurt the country’s economy.
Critics also say the U.S. stock market may be overheated as the Federal Reserve cuts back on what was once impossible: bringing inflation down to 2% without triggering a recession.
Barry Bannister, director of equities at Stifel, continues to call for a sharp decline in the S&P 500 by the end of the year. He points out that stock prices have risen much faster than corporate profits. When stocks have been this expensive by such measures in the past, he said, recessions and sharp declines in stocks have followed.
He also warned in a report that the slowdown in hiring “is now a sign of recession risks.”
There were no economic releases on Friday’s calendar to show where the economy is headed. Next week will see preliminary reports on U.S. business activity, a final look at how quickly the economy grew in the spring and the latest update on U.S. consumer spending.
The S&P 500 ended the week down 11.09 points to 5,702.55. The Dow Jones rose 38.17 points to 42,063.36 and the Nasdaq fell 65.66 points to 17,948.32.
In the bond market, the 10-year Treasury yield rose to 3.74% from 3.72% late Thursday.
On overseas stock markets, indices fell across Europe after rising in Asia. The Nikkei 225 rose 1.5% in Tokyo after the Bank of Japan kept interest rates steady as expected.
Choe writes for the Associated Press. AP writers Matt Ott and Zimo Jong contributed to this report.
