U.S. stocks held firm on Friday, as Wall Street braced for another potential milestone while investors weighed the prospects for future rate cuts.
The Dow Jones Industrial Average (^DJI) held steady after touching the critical 40,000 mark for the first time during Thursday’s session. The S&P 500 (^GSPC) rose 0.1%, while the Nasdaq Composite (^IXIC) also gained 0.1%, positioning all major indices for weekly gains.
The recent rise in stock prices encountered resistance following comments from Federal Reserve officials indicating that interest rates could remain at historically high levels for an extended period. This tempered optimism fueled by recent favorable inflation data that had fueled hopes of a rate cut in September. With a light economic and corporate calendar on Friday, there were few catalysts to push the Dow Jones beyond the 40,000 point threshold, while the S&P 500 and Nasdaq approached their own all-time highs.
Attention focused on Federal Reserve officials Mary Daly and Christopher Waller, who were scheduled to speak Friday. Investors were keen to discern whether his comments would align with the cautious stance of his peers, emphasizing the need for clear signs of cooling inflation before considering any rate cuts.
Market Drivers: Reddit Soars, GameStop Sinks
Shares of Reddit (RDDT) rose 15% after the market open, approaching its highest close of $65.11 reached in March. The social media company announced a partnership with OpenAI, integrating ChatGPT with Reddit content to enhance its platform.
By contrast, GameStop (GME) stock plunged more than 20% following the retailer’s projection of a decline in first-quarter sales as consumers increasingly turn to online shopping. Despite a brief rally at the start of the week reminiscent of the meme stock craze of 2021, GameStop stock has faced a downward trend in recent days.
Wall Street awaits key information from the Fed
The major indexes showed little movement at the start of the session on Friday, with Wall Street closely watching the Dow’s next attempt to surpass the important 40,000 milestone.
The Dow Jones Industrial Average (^DJI) held its ground after reaching the milestone on Thursday. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) posted modest gains of 0.1%, positioning themselves for a positive weekly close.
Reddit’s pre-market surge in OpenAI collaboration
Shares of Reddit (RDDT) rose 14% in premarket trading following the announcement of a new collaboration with OpenAI. This agreement allows OpenAI to access Reddit data to further develop its models. Reddit co-founder and CEO Steve Huffman hinted at more such partnerships in the future as part of the platform’s strategic reinvention, following a similar deal with Alphabet (GOOGL).
Also read: Stock Futures Steady Ahead of US Inflation Report: Market Overview