By Christine Idzelis and Joseph Adinolfi
U.S. stocks ended slightly higher Friday, with the S&P 500 index edging up after technically exiting bear-market territory a day earlier. All three major U.S. stock indexes booked small weekly gains, as investors await the Federal Reserve’s policy decision on interest rates.
How stock indexes traded
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The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% rose 43.17 points, or 0.1%, to close at 33,876.78.
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The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.11% gained 4.93 points, or 0.1%, to finish at 4,298.86.
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The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.16% increased 20.62 points, or 0.2%, to end at 13,259.14.
For the week, the Dow rose 0.3%, the S&P 500 gained 0.4% and the Nasdaq advanced 0.1%. The technology-heavy Nasdaq eked out a seventh straight week of gains, its longest winning streak since November 2019, according to Dow Jones Market Data. The Dow booked back-to-back weekly gains, while the S&P 500 climbed for a fourth straight week in its longest winning streak since August 2022.
What drove markets
U.S. stocks finished higher Friday, with the S&P 500 booking a modest weekly gain, as investors looked ahead to the Federal Reserve’s upcoming policy meeting.
The S&P 500 exited bear-market territory on Thursday by closing 20% above last year’s trough in October. Although Wall Street cheered the milestone after a long, painful bear market, some are cautious about the technical exit.
“We advise investors against assuming that the recent upswing in equities can gain momentum,” said Solita Marcelli, chief investment officer for the Americas, at UBS Global Wealth Management, in a note Friday. “Until markets reach a new all-time high, it’s impossible to know whether the bear market trough — the ultimate low of the market cycle — is behind us.”
James Demmert, CIO at Main Street Research, was also cautious.
“Even though the S&P 500 is up just over 20% from the October 2022 low, that does not mean the bear market is over yet,” Demmert said in emailed commentary Friday. “The bear markets of 2000 and 2008 both saw rallies in excess of 20%, which did not constitute the end of the bear market, as the market experienced further downside after those rallies.”
Friday was relatively quiet, with little economic data, as investors turned their attention to next week when May inflation data and policy decisions from the Federal Reserve and European Central Bank are due.
Fed-funds futures on Friday were pointing to a 71.2% probability that the central bank will announce at the conclusion of its two-day policy meeting on June 14 that it’s pausing its interest-rate increases, according to the CME FedWatch Tool, at last check. Traders saw a 28.8% chance of a quarter-point rate hike by the Fed.
The Fed has been raising rates to combat high inflation.
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