On Friday, U.S. stocks exhibited mixed performance as investors adjusted to the Federal Reserve's first rate hike in three years and grappled with concerns over the capabilities of artificial intelligence. The Nasdaq Composite rose 0.4%, finishing the week positively; in contrast, the S&P 500 increased by 0.2% but recorded a weekly loss. The Dow Jones Industrial Average dropped 0.2% and lost over 1.5% for the week. The 10-year Treasury yield climbed by five basis points, nearing the 5% mark, as traders predicted another rate hike in October.
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Despite the anticipated 25 basis point rate hike by the Fed earlier in the week, market sentiment remained cautious. Analysts and CEOs, including JPMorgan Chase's Jamie Dimon, expressed skepticism regarding the sufficiency of a single rate increase to combat persistent inflation. Oil prices slightly decreased to below $100 as the Iran conflict approaches its seventh month, while disruptions in the Strait of Hormuz continue to complicate the global energy market.
Chip stocks rebounded notably following a sell-off, driven by statements from Anthropic and OpenAI urging a slowdown in AI development. The PHLX Semiconductor index finished the week marginally higher. Additionally, Bitcoin surged over 6% to surpass $81,000, buoyed by a risk-on sentiment among investors despite the failed CLARITY Act and the recent Fed rate rise.
In remarks following the Fed's rate hike, Kansas City Federal Reserve President Jeff Schmid indicated that further rate hikes might be necessary, echoing sentiments from other Fed officials. Meanwhile, Apple launched its iPhone 18 Pro line with a $100 price increase, attributed to supply chain constraints amid rising demand for AI technology.
Moody's reported that U.S. life insurers' private credit investments have reached about $2.1 trillion, highlighting a growing trend in riskier credit allocations.
In corporate news, Warren Buffett stepped down as chairman of Berkshire Hathaway, a move that prompted reflections on his impactful career and future oversight of the company under his son, Howard Buffett.