The New York Stock Exchange building is pictured in New York (AP Photo/Seth Wenig)
Wall Street rounded off a strong week on a calm note this Friday, quietly closing its third winning week out of the past four. After days of momentum, the energy faded just enough to give markets a breather.
The S&P 500 nudged down slightly, giving up less than 0.1% after notching an all-time high just a day earlier. The Dow Jones Industrial Average dropped by 142 points (0.3%), while the Nasdaq composite edged up slightly—just enough to set a new record of its own.
Railroad Merger Hopes Spark Norfolk Southern Gains
Among Friday’s highlights, Norfolk Southern saw its stock jump by 2.5% following reports that it’s in merger talks with Union Pacific. The deal could result in the largest railway network in North America, linking both coasts. However, such a massive merger would likely face heavy regulatory hurdles. Meanwhile, Union Pacific shares dipped 1.2%.
Mixed Results for Big Names
Netflix took a hit, sliding 5.1% even though it posted profits that beat Wall Street estimates. Analysts weren’t too surprised, pointing out the stock had already skyrocketed by 43% this year—six times more than the broader S&P 500. In other words, good news was already priced in.
American Express also released better-than-expected earnings but saw its shares fall by 2.3%. Analysts pointed to slower growth in new credit card accounts as a reason for investor caution.
Energy giant Exxon Mobil fell 3.5% after losing its challenge to Chevron’s $53 billion acquisition of Hess. A court in Paris gave Chevron the green light to move ahead with the deal. Chevron’s shares also slipped slightly, down 0.9%.
Financial Sector Shows Strength
Not all the news was downbeat. Several financial companies rode high on strong earnings:
- Charles Schwab climbed 2.9%
- Regions Financial leaped 6.1%
- Comerica gained 4.6%
Overall, the day’s final numbers showed the S&P 500 at 6,296.79 (down 0.57 points), the Dow at 44,342.19 (down 142.30), and the Nasdaq up slightly to 20,895.66.
Bond Market Calms as Inflation Fears Ease
In the bond market, yields fell after new data suggested Americans are slightly less worried about inflation. A University of Michigan survey showed inflation expectations dropped to 4.4% for the year ahead—down from last month’s 5%.
This matters because when people expect high inflation, their behaviour can drive prices up even further. Survey director Joanne Hsu noted that without reassurance—like stable trade policies—consumer confidence likely won’t rebound significantly.
As a result, the yield on the 10-year Treasury dropped to 4.42%, down from 4.47%, while the 2-year yield fell to 3.87% from 3.91%.
Fed Debate: Cut Now or Wait?
Federal Reserve Governor Chris Waller added to speculation by suggesting a possible interest rate cut at the Fed’s upcoming meeting. His comments follow criticism from former President Donald Trump, who has repeatedly pressured the Fed to lower rates to ease debt costs.
While lower rates can support the economy, they also risk pushing inflation higher. Fed Chair Jerome Powell, meanwhile, is holding out for more data—especially on the inflationary effects of Trump’s tariffs—before making any move.
Market watchers now believe a rate cut is more likely in September than in the Fed’s upcoming July session, based on data from CME Group.
Global Markets Mixed Ahead of Political EventsAbroad, markets showed mixed reactions. Hong Kong’s Hang Seng rose 1.3%, while Tokyo’s Nikkei 225 slipped 0.2% as Japan prepares for a crucial parliamentary vote that could shake up the ruling coalition.
