U.S. stocks declined on Friday, ending the week lower as traders assessed former President Trump's comments that he would not want Kevin Hassett to succeed as Federal Reserve Chair.
The S&P 500 index closed down 0.06% on Friday. Despite gains in major chipmaker stocks, with a closely watched index of semiconductor manufacturers rising 1.1%, the benchmark struggled to gain upward momentum. Small-cap stocks continued their advance, with the Russell 2000 index outperforming the main U.S. stock benchmark for an 11th consecutive trading session.
Trump stated on Friday that his administration would lose one of its most powerful economic voices if Hassett were to leave his role as Director of the National Economic Council. Hassett has been viewed as one of the leading candidates to replace Jerome Powell as Fed Chair.
"If forced to choose between the two Kevins, I would pick Hassett over Warsh," said Neil Dutta of Renaissance Macro Research. "Diminishing Hassett's chances only benefits Warsh. We know Kevin Warsh has held hawkish views throughout his career. He detests inflation even when it runs below the Fed's target. Given the President's policy views, this would be a fascinating choice."
"As we begin 2026, a new leader is emerging," stated Brian Jacobsen, Chief Economic Strategist at Annex Wealth Management. "Small-cap value stocks are displacing large-cap growth stocks as the new frontrunner. For years, the market has seen false starts, but the long-awaited 'Great Rotation' may finally be arriving."
Regional bank stock PNC Financial Services Group Inc. closed 3.8% higher after reporting growth in its fourth-quarter earnings. Conversely, Regions Financial Corp. finished down 2.6%, after its fourth-quarter earnings per share and total loans fell short of average analyst estimates.
At the market close, the S&P 500 index was down 0.06% at 6,940.01 points.
The Dow Jones Industrial Average declined 0.17% to 49,359.33 points.
The Nasdaq Composite Index decreased 0.06% to 23,515.39 points.
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