The S&P 500 closed nearly unchanged on Friday but notched its most significant weekly gain of 2024 after the Federal Reserve reaffirmed its projections for three interest rate cuts by the end of the year.
The Nasdaq and a semiconductor index ended slightly higher for the day, with the semiconductor index posting a strong weekly increase due to ongoing optimism about artificial intelligence.
However, the Dow closed lower for the day. Consumer discretionary shares also dipped on Friday.
Nike's shares fell 6.9% following a warning from the company that revenue in the first half of fiscal 2025 would decline by a low-single-digit percentage.
Lululemon Athletica saw its shares drop 15.8% after forecasting annual revenue and profit below expectations.
The Fed's decision to keep rates steady but signal a future cut was viewed positively by the market, with traders now anticipating a 71% chance of the first rate cut in June, up from 56% earlier in the week, according to the CME's FedWatch Tool.
The Dow Jones Industrial Average fell 305.47 points, or 0.77%, to 39,475.90, the S&P 500 lost 7.35 points, or 0.14%, to 5,234.18, and the Nasdaq Composite gained 26.98 points, or 0.16%, to 16,428.82. For the week, the S&P 500 rose 2.3%, the Dow climbed 2%, and the Nasdaq jumped 2.9%.
Michael Sheldon, director at RDM Financial Group at Hightower, noted,
"At some point before too long, it wouldn't be surprising to see a pullback or correction, or even a sideways trading period, after the gains we've had since the October lows."
Among Friday's gainers, FedEx surged 7.4% after beating Wall Street's expectations for quarterly profit.
On the other hand, Digital World Acquisition dropped 13.7% after shareholders approved its merger with former U.S. President Donald Trump's media and technology company.
U.S. exchanges saw a total volume of 9.45 billion shares traded, compared with the 12.34 billion average over the last 20 trading days.