US stocks mounted an impressive comeback on Friday, reversing course from a significant sell-off triggered by the Federal Reserve’s hawkish stance earlier in the week. The S&P 500 demonstrated remarkable resilience, closing 1.1 per cent higher after overcoming early trading losses.
The market’s recovery was fuelled by lower-than-anticipated inflation figures, with the Fed’s preferred measure of price pressures registering at 2.4 per cent for November. This data helped soothe investor concerns following Wednesday’s Fed announcement, which had indicated fewer interest rate cuts for the coming year.
Despite the recent volatility, the S&P 500 maintains an impressive 24 per cent gain for the year, though it remains below the early December peaks that had positioned Wall Street for its strongest performance in five years. Barclays strategist Emmanuel Cau characterised the mid-week decline as a “reality check” after a period of enthusiastic buying in speculative stocks and digital assets.
Treasury yields responded positively to the inflation data, with the ten-year yield declining 0.05 percentage points to 4.51 per cent. Internal Fed discussions revealed divergent views, with Cleveland Fed president Beth Hammack advocating for sustained rates until clearer evidence of inflation control emerges, while New York Fed president John Williams supported further cuts.
European markets failed to mirror the US recovery, as the Stoxx Europe 600 closed down 0.9 per cent. The index was particularly affected by Novo Nordisk’s more than 20 per cent decline following disappointing obesity drug trial results. Adding to European market pressures, Donald Trump’s social media announcement warning the EU about potential tariffs unless substantial US oil and gas commitments were made created additional uncertainty for investors.
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.