US STOCKS-Wall Street stocks notch weekly gains as investors digest rally

BY Reuters | ECONOMIC | 05/17/24 04:01 PM EDT

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(Updates to 4 p.m. ET)

By Chibuike Oguh and Shristi Achar A

NEW YORK, May 17 (Reuters) - U.S. stocks ended mixed on Friday as investors took a breather after a weeks-long rally underpinned by data that supported expectations for interest rate cuts by the Federal Reserve this year.

The benchmark S&P 500 edged higher after paring losses while the Nasdaq fell, but both scored a fourth straight week of gains. The Dow rose to end the fifth week of advances in a row.

Strong corporate results and inflation and other economic data have bolstered investor hopes for Fed rate cuts this year.

All three main indexes touched record highs on Thursday, when the Dow hit the 40,000 milestone before closing in the red.

"Today is a bit of a digestion day: we just broke out through record highs and now we're on a fourth straight week of gains, and the market appears to take a breaker," said Keith Lerner, co-chief investment officer at Truist Advisory Services in Atlanta.

Traders see a 68% chance of the Fed's first rate cut in September, the CME FedWatch Tool showed.

According to preliminary data, the S&P 500 gained 6.79 points, or 0.13%, to end at 5,303.89 points, while the Nasdaq Composite lost 12.35 points, or 0.07%, to 16,685.97. The Dow Jones Industrial Average rose 141.50 points, or 0.35%, to 40,010.88.

"For all the times that I've seen the market hit milestones and new highs, there's almost always consolidation around it even though it seems it's all psychological," said Tom Plumb, chief executive and portfolio manager at Plumb Funds in Madison, Wisconsin.

"People have got mixed signals on inflation this week and the next big catalyst is next week when Nvidia (NVDA) reports. So it's one of those days when you seem to be biding your time."

Advanced Micro Devices (AMD) gained after Microsoft (MSFT) said it plans to offer its cloud computing customers a platform of AMD artificial intelligence chips that will compete with components made by Nvidia (NVDA).

Reddit (RDDT) rose following a partnership with OpenAI to bring its content to ChatGPT.

GameStop (GME) dropped after filing for a mixed-shelf offering and saying it expects first-quarter net sales to drop from a year ago.

(Reporting by Chibuike Oguh in New York; additional reporting by Bansari Mayur Kamdar and Shristi Achar A in Bengaluru; Editing by Richard Chang)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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