US equities closed at fresh records into the Memorial Day weekend, with the Dow Jones Industrial Average gaining 294 points, or 0.58 per cent, to a record close of 50,579.70 on Friday. The S&P 500 added 0.37 per cent to finish at 7,473.47 and the Nasdaq Composite rose 0.19 per cent to 26,343.97; all three indexes posted weekly gains and the broad market is now up around 16 per cent for the year.
The session’s gains were driven largely by softening oil prices and renewed optimism around the US-Iran ceasefire talks, with Brent crude closing at $103.54 a barrel after touching nearly $112 a fortnight earlier. Defensive sectors led the tape: industrials and consumer staples both rose more than 1 per cent, while energy lagged with a 1.8 per cent decline.
Friday’s big macro event was the swearing-in of Kevin Warsh as the new chair of the Federal Reserve, an event that markets had largely already digested. Fed funds futures continue to imply roughly 90 basis points of cuts through the end of the year, broadly unchanged on the week.
Earnings season is winding down. Walmart, which reported the previous day, warned that lower-income shoppers were under pressure from elevated gasoline prices and offered a softer outlook for the next quarter, lifting concerns about the durability of consumer spending. Nvidia’s late-cycle guidance, issued earlier in the week, kept investor enthusiasm for AI-linked names broadly intact.
European indexes closed mixed on Friday: the FTSE 100 gained 0.3 per cent, the Stoxx 600 was flat and Germany’s DAX slipped 0.1 per cent. Japanese stocks lagged as the yen briefly weakened past 159 to the dollar; the Topix slipped 0.2 per cent on the day but eked out a small weekly gain.
Treasury yields drifted modestly higher, with the 10-year rising about 2 basis points to 4.32 per cent. The yield curve remains broadly steepening from the inversion of last year. Investment-grade credit spreads tightened marginally; high-yield spreads were unchanged on the week.
Trading volumes were notably thin into the close, a typical pattern ahead of a long weekend in May. US markets are shut on Monday for Memorial Day and reopen on Tuesday morning, when traders will return to a calendar that includes Personal Consumption Expenditures inflation data on Friday and final readings from this earnings season including Salesforce and Costco.