Wall Street’s major indexes declined on Friday as investors assessed a mix of economic signals, including stronger housing market data, slowing business activity, and consumer sentiment figures. Meanwhile, Boeing’s warning of a larger-than-expected quarterly loss weighed on the Dow.
Markets React to Economic Indicators
Investors processed conflicting economic data that painted an uncertain picture of the U.S. economy. Housing market figures came in stronger than expected, while an S&P Global survey revealed that business activity had slowed to a nine-month low in January, as rising prices continued to pressure businesses.
However, firms also reported increased hiring, reinforcing the Federal Reserve’s cautious stance on monetary policy.
The University of Michigan reported a drop in consumer sentiment, with its final estimate falling to 71.1 from a prior reading of 73.2. Despite mixed signals, traders continue to expect the Fed to keep interest rates unchanged at its Jan. 28-29 meeting, with the first rate cut anticipated in June.
Market Performance and Sector Movements
As of 2:34 p.m. ET, major indexes posted losses:
- Dow Jones Industrial Average: down 168.44 points (-0.38%) to 44,396.63
- S&P 500: down 24.38 points (-0.40%) to 6,094.33
- Nasdaq Composite: down 131.66 points (-0.66%) to 19,922.02
Despite Friday’s dip, all three indexes remained on track for their second consecutive weekly gains.
Boeing Weighs on the Dow
Boeing (BA.N) shares dropped 1.4% after the company warned of a $4 billion fourth-quarter loss, adding to investor concerns. Boeing’s stock has struggled in 2024, suffering its steepest annual drop since the pandemic. The company is set to report full earnings on Tuesday.
Sector Winners and Losers
Six of the 11 S&P 500 sectors rose, with utilities leading the gains:
- Utilities (.SPLRCU): up 1.05%, led by NextEra Energy (NEE.N), which surged 6%, making it the S&P 500’s top gainer.
- Technology (.SPLRCT): the worst-performing sector, down 1.33%, dragged lower by Texas Instruments, which fell 7.1%.
Corporate Earnings in Focus
Earnings reports were a key focus for investors:
- American Express (AXP.N): posted a 12% increase in fourth-quarter profit but saw its stock fall 2.6%, pressuring the Dow.
- Verizon (VZ.N): rose 1.4% after reporting higher-than-expected subscriber additions.
Investors Await Major Economic and Policy Updates
Looking ahead, investors are preparing for a critical week that includes key inflation data, economic growth figures, and the Federal Reserve’s policy meeting. Scott Helfstein, head of investment strategy at Global X, summed up the current market sentiment:
“It really boils down to some mixed economics and earnings news.”
Adding to market uncertainty are potential policy changes from the new Trump administration. Investors are watching for clarity on trade policies after President Donald Trump mentioned tariffs on Mexico, Canada, China, and the European Union, with possible announcements as early as Feb. 1 and major decisions expected by April 1.
Stock Market Breadth and Indicators
Market breadth remained positive despite Friday’s decline:
- NYSE: Advancing stocks outnumbered decliners by a 1.56-to-1 ratio.
- Nasdaq: 2,319 stocks rose, while 2,010 declined, with a 1.15-to-1 advancer-to-decliner ratio.
- S&P 500: Posted 19 new 52-week highs and only two new lows.
- Nasdaq Composite: Recorded 71 new highs and 55 new lows.
Conclusion
Wall Street closed lower on Friday as investors processed mixed economic data and corporate earnings, while concerns over trade policy and Federal Reserve decisions loomed. While major indexes dipped, they remain on track for weekly gains. Next week’s inflation data, Fed meeting, and policy updates from the Trump administration will be key in shaping market direction.
