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25/03/24 Briefing

U.S. stocks closed mixed on Friday but clocked their best week of the year in terms of percentage gains on renewed optimism after the Federal Reserve said earlier week that it plans three interest rate cuts by the end of 2024. The Dow and the S&P 500 closed in the red but the Nasdaq finished in positive territory.

The Dow Jones Industrial Average (DJI) fell 0.8% or 305.47 points to end at 39,475.90 points, recording its best week since December 2023 and after back-to-back record-setting sessions

The S&P 500 slipped 0.1% or 7.35 points, to finish at 5,234.18 points. Communication services stocks were the biggest gainer while real estate and consumer discretionary stocks were the worst performers.

The Real Estate Select Sector SPDR (XLRE) lost 1.2%, while the Consumer Discretionary Select Sector SPDR (XLY) slipped 0.9%. The Communication Services Select Sector SPDR (XLC) gained 0.2%. Eight of the 11 sectors of the benchmark index ended in negative territory.

The tech-heavy Nasdaq jumped 0.2% or 26.98 points to close at 16,428.82 points.

The fear-gauge CBOE Volatility Index (VIX) was up 1.08% to 13.06. A total of 9.45 billion shares were traded on Friday, lower than the last 20-session average of 12.34 billion.

Investors Digest Positive News

Markets ended mixed on Friday but closed the week on a high after some positive news bolstered their optimism and outlook. Earlier this week, the Federal Reserve left interest rates unchanged in its current range of 5.25-5.5%. The central bank has now left interest rates unchanged since July 2023.

More importantly, investors’ sentiment got a boost after Federal Reserve Chairman Jerome Powell said that the central bank still plans three interest rate cuts by the end of this year. Although he didn’t give any timing of the first cut, Powell hinted at three 25 basis point rate cuts this year.

Markets are now pricing in a 71% chance of a quarter percentage point rate cut in June according to the CME FedWatch Tool. The expectations were 56% at the beginning of the week.

On Friday, investors digested the positive news as they continued to gauge the exact time of the first interest rate cut.

Consumer discretionary stocks suffered on Friday. Shares of NIKE, Inc. (NKE) tumbled 6.9% after the company issued disappointing guidance and said that sales in China were slowing.

No major economic data was released on Friday.

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