Wall Street’s main indexes closed lower on Friday as investors stepped back while they digested a mixed bag of economic data and earnings reports and prepared for a week filled with economic releases and a Federal Reserve meeting. The technology sector was the biggest drag on the market as megacap stocks including Nvidia reversed after rallying sharply earlier in the week.
The housing market data was hotter than expected, while an S&P Global survey showed business activity slowing to a nine-month low in January as prices rose. However, firms reported increased hiring, supporting the Federal Reserve’s cautious approach to monetary policy this year. The University of Michigan’s final estimate on consumer sentiment dropped to 71.1 from a previous estimate of 73.2.
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At the end of a relatively light week for data, traders were betting the Fed would keep borrowing costs unchanged at its Jan. 28-29 meeting and expect its first rate cut in June, the latest data from CME Group’s FedWatch tool showed.”It really boils down to some mixed economics and earnings news,” said Scott Helfstein, head of investment strategy at ETF company Global X.
Investors are bracing for next week’s slew of key inflation and economic growth data as well as the Fed meeting, while waiting for policy updates from the Trump administration. “There is anticipation of a really big news week ahead. And there is lingering policy uncertainty with the new administration’s first week on the job, which is likely to persist for the next few weeks,” he said.
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Investors worry that U.S. President Donald Trump’s proposed tariffs could exacerbate inflationary pressures and slow Fed rate cuts, after he referred to trade policy multiple times this week without providing concrete details of his plans. Trump has said tariffs on Mexico, Canada, China and the European Union could be announced on Feb. 1, but analysts say major plans could be announced on April 1.
According to preliminary data, the S&P 500 lost 17.48 points, or 0.29%, to end at 6,101.23 points, while the Nasdaq Composite lost 101.78 points, or 0.51%, to 19,951.90. The Dow Jones Industrial Average fell 146.14 points,
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