On Friday, the three major U.S. stock indices closed in positive territory. The same day that Federal Reserve Chair Kevin Wash was sworn in, former U.S. President Donald Trump stated after the market close, "I now have an excellent Fed Chair in Wash, and we will lower rates rapidly." The S&P 500 rose 0.88% this week, marking its eighth consecutive weekly gain and its longest winning streak since a nine-week run that ended in late 2023.
In U.S. markets, the Dow Jones Industrial Average gained 294.04 points, or 0.58%, to close at 50,579.70. The Nasdaq Composite added 50.87 points, or 0.19%, to finish at 26,343.97. The S&P 500 increased by 27.73 points, or 0.37%, to settle at 7,473.45. Qualcomm surged 11.6%, leading gains in the AI chip sector, while Advanced Micro Devices rose nearly 4%. The Nasdaq Golden Dragon China Index fell 2.2%, with NIO dropping over 7% and Baidu declining 2.58%.
In European markets, Germany's DAX 30 rose 244.38 points, or 0.99%, to 24,901.14. The UK's FTSE 100 gained 21.66 points, or 0.21%, to 10,465.13. France's CAC 40 added 29.75 points, or 0.37%, to 8,115.75. The Euro Stoxx 50 increased by 62.38 points, or 1.05%, to 6,022.70. Spain's IBEX 35 edged up 5.58 points, or 0.03%, to 17,980.78. Italy's FTSE MIB climbed 343.80 points, or 0.70%, to 49,512.50.
In Asian markets, Japan's Nikkei 225 rose 2.68%, South Korea's KOSPI gained 0.41%, India's Sensex increased by 0.31%, and Singapore's Straits Times Index added 0.44%.
The U.S. Dollar Index, which measures the dollar against a basket of six major currencies, fell 0.02% to settle at 99.241. In late New York trading, one euro traded at $1.1612, unchanged from the previous session. One pound traded at $1.3446, up from $1.3426. One dollar bought 159.15 Japanese yen, up from 159.08, and 0.7844 Swiss francs, down from 0.7874. One dollar traded at 1.3807 Canadian dollars, up from 1.3783, and 9.3432 Swedish kronor, down from 9.3501.
In cryptocurrencies, Bitcoin fell over 2.3%, dropping below $77,000 to trade at $75,800. Ethereum declined 2.8% to $2,072.5.
Oil prices fluctuated before closing slightly higher as traders assessed the prospects for a ceasefire agreement between the U.S. and Iran. WTI crude rose 0.3% to settle just below $97 per barrel, posting a weekly loss of 8.4%. July Brent crude gained 0.9% to settle at $103.54 per barrel.
Precious metals declined as markets increased bets on Federal Reserve interest rate hikes. Spot gold fell 0.76% to $4,508.32 per ounce, while spot silver dropped 1.49% to $75.524 per ounce.
On the macro front, media reports citing informed sources indicated that negotiations with Iran are ongoing and no agreement will be reached until consensus is formed on all disputed issues. The sources emphasized that the current focus is on "ending the war," and no other issues will be negotiated until this is resolved. While progress has been made on some topics compared to earlier stages, no deal will be finalized until all contentious matters are agreed upon.
Kevin Wash was sworn in as Federal Reserve Chair on Friday at the White House. Media reports noted he is the first Fed Chair to take the oath at the White House since Alan Greenspan in 1987 and his first public appearance with former President Trump since being nominated in January. Wash assumes leadership at a time of heightened risks, with inflation rising, long-term Treasury yields climbing, and a growing number of investors believing the Fed's next move may be a rate hike rather than the cut Trump desires.
Wash stated he will lead a reform-oriented Federal Reserve. The 17th Fed Chair, sworn in at the White House, said, "The mission of the Federal Reserve is to promote price stability and maximum employment." He added, "When these goals are pursued with wisdom and clarity, independence and firm resolve, inflation can be reduced, economic growth can be stronger, real take-home pay can be higher, America can be more prosperous, and, just as importantly, America's standing in the world can be more secure." He continued, "To fulfill this mission, I will lead a reform-oriented Federal Reserve, learning from past successes and mistakes, moving beyond static frameworks and models while adhering to clear standards of integrity and performance."
U.S. consumer sentiment hit a record low, weighed down by inflation concerns. Affected by the war in Iran, the University of Michigan's final May consumer sentiment index fell to 44.8. Consumers' long-term inflation expectations also deteriorated significantly, with expectations for annual price increases over the next five to ten years rising to 3.9% from 3.5% in April, a seven-month high. They also expect prices to rise 4.8% over the next year. Gasoline prices remaining near their highest levels since 2022 have exacerbated American concerns about rising living costs and the failure to reach a war-ending agreement. The impact of inflation on household budgets, particularly for lower-income consumers, poses risks to future spending prospects. Survey director Joanne Hsu stated, "Cost of living issues remain the top concern, with 57% of respondents voluntarily noting that high prices are eroding their personal finances, up from 50% last month." Hsu added, "The key is that consumers seem worried inflation will not only spread to areas beyond fuel prices but that this upward trend could persist for a long time to come."
Federal Reserve Governor Waller stated that inflation risks mean the Fed should no longer signal impending rate cuts. On Friday, Waller said that given growing inflation risks, the Fed should no longer treat further rate cuts as the default plan. This marks a shift from his position supporting cuts as recently as January. In a speech, Waller noted that as the Middle East conflict continues, rising costs for oil and other commodities are increasingly likely to trigger broader, persistent inflation across the economy. He stated it is time for the Fed to stop signaling that its next move will most likely be another rate cut. Waller said keeping rates stable in the current 3.5% to 3.75% range for the foreseeable future is likely the correct approach. He added, "If inflation does not subside soon, I can no longer rule out the possibility of future rate hikes." Waller now endorses the view that the Fed should clearly indicate its next rate adjustment could be either a cut or a hike.
According to an institution, the S&P 500 is on track for its strongest earnings growth since 2021. As growth momentum expands from AI-driven gains to most U.S. businesses, the benchmark index could achieve its most robust profit growth in five years. Data from the institution shows about 93% of companies in the index have reported earnings, with 83% exceeding analyst expectations—the highest proportion since 2021. The data indicates growth across all sectors except healthcare. Overall, strong performances in the energy and technology sectors offset weak consumer sentiment linked to rising oil prices due to the Iran war. Additionally, the communication services and consumer discretionary sectors performed most impressively, while materials and industrials also exceeded expectations. Analysts Welnhofer and Cain noted that if cyclical and non-AI sectors begin to contribute significantly while Nvidia and the AI sector continue to generate substantial profits, 2026 might not see a typical end-of-cycle slowdown but could resemble the post-pandemic profit surge of 2021.
Canadian producer prices rose for the fourth consecutive month in April. Prices for manufactured goods in Canada increased again in April, raising the risk of cost pressures being passed on to consumers. Statistics Canada data showed the Industrial Product Price Index rose 2% month-over-month in April, marking the fourth straight monthly increase. Multiple commodities faced pressure during the month as the ongoing Middle East conflict disrupted shipping in the Strait of Hormuz, with significant price increases for energy products, chemicals, and unwrought aluminum. Year-over-year, the producer price index jumped 11.4%, marking the 19th consecutive annual increase, largely driven by strong investor demand for much of last year, which pushed up prices for precious metals and their alloys.
Regarding individual stocks, Saylor stated Bitcoin is entering a "spring" recovery phase and the market is poised for a rebound. Michael Saylor, founder of MicroStrategy, stated in an interview that Bitcoin has bottomed after retreating from a high of around $125,000 to near $60,000 and is now entering a "spring" recovery phase. He noted there is solid support at current levels and expects the market to rebound from here. He also pointed out that as the digital credit market forms, new Bitcoin supply from miners is being fully absorbed by the market. Saylor stated, "Our company might buy all the Bitcoin miners produce from now until 2140." Additionally, he mentioned that the advancement of the U.S. CLARITY Act and the SEC's "innovation exemption" policy for security tokenization could both be significant positive developments for the digital asset market.
Ark Invest purchased Bullish stock for the fourth consecutive day, accumulating $12.5 million in purchases this week. Cathie Wood's investment management firm, Ark Invest, bought $5 million worth of Bullish stock on Thursday, marking the fourth consecutive trading day of increasing its stake in the crypto group. Based on closing prices, Ark Invest has purchased a total of $12.5 million worth of BLSH shares since Monday. On Thursday, BLSH stock closed at $35.96, down 0.2%. Over the past two weeks, the stock has fallen more than 17%.
In terms of analyst ratings, JPMorgan lowered its price target for Futu Holdings from $300 to $87.
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