Wall Street looks set end the week on a whimper on Friday, with stocks little changed in afternoon trading as investors digested the unexpectedly dovish comments from the US Federal Reserve this week.
US stocks have been on tear since Donald Trump’s election victory in November, with the major indices setting a series of new record highs on expectations that the fiscal stimulus and lighter regulations proposed by the new administration will turbo charge US growth.
The rally got a fresh jolt of momentum on Wednesday after the Fed stuck to its outlook for a gradual tightening policy following a widely expected quarter point rate hike. However the enthusiasm that had initially greeted the central bank’s less aggressive stance quickly faded by Thursday and stocks continue to trade sideways on Friday.
The S&P 500 was up 0.2 per cent at 2,385.10 in afternoon trade while the Dow Jones Industrial Average and the Nasdaq Composite also rose by a similar margin to 20,970.62 and 5,911.91 respectively.
Within the benchmark S&P 500, there was a pull-back on “Trump trade” stocks, as investors left behind the financial sector, which has stood to benefit most from the new president’s policies, in favour of so-called haven assets such as utility stocks, which offer juicy dividends, and US Treasuries.
The 10-year note yield, which moves inversely to price, was down 4.2 basis points to 2.499 per cent. The DXY index, which measures the dollar against a basket of its peers, was down less than 0.1 per cent at 100.31.