The S&P 500 and Nasdaq Composite opened higher on Friday as traders closed out a week dominated by the Federal Reserve's first interest-rate increase in over three years and an easing in Middle East oil-supply fears. The Dow Jones Industrial Average held little changed after all three indices posted sharp gains in the prior session.
Indices build on Thursday's rally
The S&P 500 rose 0.1% to 7,646.72 points at 09:32 ET on Friday. The Nasdaq Composite added 0.4% to 26,522.44 points, while the Dow Jones Industrial Average held little changed at 51,790.60 points.
Those gains followed a stronger session on Thursday, when the S&P and Nasdaq climbed roughly 1.1% and 1.7%, respectively, and the Dow ticked up 0.6%.
Fed hike read as inflation fight, not a threat to stocks
Higher rates typically weigh on equity valuations. Yet many investors read the Fed's hawkish decision this week as a sign of the central bank's commitment to corralling energy-fueled inflation, as well as proof of its independence — a question that has grown louder as President Donald Trump has repeatedly pushed for large rate cuts.
Traders were also assessing the Bank of Japan's decision to lift rates to a 31-year high on Friday, its second increase this year and sixth since March 2024. According to Deutsche Bank: "we're in a globally synchronised cycle of rate hikes again", its analysts said, pointing to the Fed's move on Wednesday and the ECB's hike last week.
Oil's third day of declines eases pressure on stocks
Analysts tied this week's stock swings largely to oil, and prices fell for a third straight session on Friday as hopes that Middle Eastern producers could restore disrupted supplies offset concerns over a widening regional conflict.
Fresh fighting between Saudi Arabia and Yemen's Iran-backed Houthis added another layer of risk to supply routes. Still, Saudi Arabia is reportedly seeking to restore about half of its damaged pipeline's capacity within days, Bloomberg News reported, faster than earlier estimates of weeks. Riyadh has also offered Asian refiners additional crude cargoes through ship-to-ship transfers off Oman's Sohar port.
Risks have not disappeared: Iran's Revolutionary Guards Navy said a Togo-flagged tanker was struck while attempting what it described as an illegal passage through the Strait of Hormuz, and President Trump told Axios he is nearing a decision on resuming large-scale military action against Iran.
Source: Investing.com
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