The S&P 500 Index edged higher to start Friday trading, recovering some of the losses from the previous session, when concerns around stretched valuations and the risk of an AI bubble combined to spark a sharp intraday reversal.
The US equities benchmark rose 0.2%, helped by gains in megacap stocks Alphabet Inc. and Apple Inc. The tech-heavy Nasdaq 100 was little changed. The S&P 500 has shed about 4% this month through Thursday’s close amid worries around AI valuations, after it set a record high in late October.
Helping buoy the tone early on, Federal Reserve Bank of New York President John Williams said he sees room for the central bank to lower interest rates again in the near term amid labor-market softness. The remarks boosted bets on a December policy easing.
On Thursday, fading rate-cut bets had weighed on equities, after several officials signaled they saw reason to keep rates on hold for now, especially with the after effects of the government shutdown delaying the release of key economic figures.
Nvidia Corp. fell, while Alphabet rallied 2.8%. Earlier this week, Alphabet shares soared with a wave of glowing reviews for the newly released Gemini AI model, while Nvidia initially rallied Thursday after a better-than-expected earnings report the prior evening.
“We continue to be constructive,” Max Kettner, chief multi-asset strategist at HSBC Bank, said via email. “From a fundamental perspective, nothing has changed in the last few weeks.”
Better-than-expected earnings reports late Thursday underscored this cycle’s generally healthy results. Intuit Inc., which rallied about 4% as the company’s chief financial officer signaled confidence; and Ross Stores Inc. which rose around 6% after the discount retailer’s forecast topped estimates, were among top S&P 500 gainers.
A rally for Eli Lilly & Co. pushed the world’s largest drugmaker across the $1 trillion threshold as investors bet on weight-loss medicines. Lilly became the first health-care company to join the $1 trillion club.
Even so, concerns about the path of the stock market persisted.
“One has to at least consider that the stock market is merely giving back a lot of the artificial buying which took place in the summer and fall,” Miller Tabak + Co.’s Matt Maley wrote in a note. “Thus it’s merely in the process of moving back to where it should be.”
Crypto-linked stocks including Strategy Inc. were in focus as Bitcoin headed for its worst monthly performance since 2022’s crypto collapse amid the broad risk-off move.
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