US stocks rose for the week as benchmark global stocks hit a record, while 10-year Treasury yields dipped. Some soft US data and latest tariff announcements have raised hopes that the Federal Reserve may be more aggressive in cutting interest rates.
The Commerce Department reported retail sales dropped 0.9% last month, the biggest decrease since March 2023. This follows an upwardly revised 0.7% increase in December. Factory output also dipped 0.1% last month, short of the estimate calling for a 0.1% increase.
US President Donald Trump directed his economic team to devise plans for reciprocal tariffs on every country that taxes American imports, raising trade war concerns. However, he stopped short of imposing another round of duties.
Investors are watching updates from the Munich Security Conference, where US Vice President JD Vance accused European leaders of censoring free speech and failing to control immigration. The conference overshadowed discussions on the war in Ukraine.
The S&P 500 ended roughly unchanged, with tech sector gains offsetting consumer staples losses. The Dow Jones Industrial Average fell 0.37%, while the Nasdaq Composite rose 0.41%. For the week, the S&P 500 gained 1.47%, and the Nasdaq marked its biggest weekly percentage gain since early December.
Expectations for a cut of at least 25 basis points by the Federal Reserve in June have crept back up to 51.3%. Dallas Fed President Lorie Logan reiterated her view that even if inflation data comes in cooler, the US central bank should not reduce short-term borrowing costs in response.
The pan-European STOXX 600 index closed down 0.24% but secured its eighth consecutive week of gains. European stocks have outperformed their US counterparts since the start of the year, but questions remain whether that can last.
Source: https://www.reuters.com/markets/global-markets-global-markets-2025-02-14