Overview
- Major U.S. indexes finished little changed on Friday and logged modest weekly losses, while small caps outperformed with the Russell 2000 up about 2% and closing at a record.
- Stronger U.S. data underpinned sentiment and the dollar, with weekly jobless claims at a six-week low, regional Fed surveys jumping, and December manufacturing output beating forecasts as the NAHB housing index slipped.
- Fed officials Raphael Bostic and Jeff Schmid reiterated the need for restrictive policy, and market pricing put the chance of a rate cut at the next meeting near 5% as Treasury yields ticked higher.
- The dollar hovered near a six-week high as President Trump signaled reluctance to nominate Kevin Hassett as Fed chair, the yen firmed after Japan’s finance minister warned of potential action, and the euro eased.
- Gold and silver fell as safe-haven demand cooled and the greenback firmed, while oil edged higher Friday after a sharp Thursday drop linked to reduced expectations of U.S. intervention in Iran.