The main U.S. equity indexes opened mixed and drifted lower Friday amid a continuing pressure campaign on Federal Reserve Chair Jerome Powell and central bank independence. Sentiment is shifting, however, and earnings remain solid.
A lively Friday on the economic calendar featured preliminary results for July from the University of Michigan Surveys of Consumer Sentiment as well as key homebuilder data.
People are feeling better but remain concerned about the economy and inflation, and construction is still fair to middling.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The headline Index of Consumer Sentiment inched up to 61.8 from 60.7 in June to its highest level in five months. "It remains a substantial 16% below December 2024," notes survey director Joanne Hsu, "and is well below its historical average."
One-year-ahead inflation expectations declined for a second straight month, from 5.0% in June to 4.4% in July. Five-year inflation expectations fell for the third straight month, from 4.0% to 3.6%.
Both short- and long-term inflation expectations are the lowest they've been since February but remain above December levels.
And the Census Bureau said housing starts increased at a better-than-forecast month-over-month pace of 4.6% to an annual rate of 1.321 million in June. Starts were down 0.5% year over year.
Building permits ticked up 0.2% month over month but were down 4.4% year over year.
The Dow Jones Industrial Average shed 0.3% to close the week at 44,342 – still just 1.5% from a new all-time closing high.
The S&P 500 was down less than a point to 6,296, and the Nasdaq Composite eked out a 10-point gain to 20,895. Both indexes remain at or near new highs.
Waller says it's time to cut rates
Meanwhile, feelings about rate cuts are also changing. Fed Governor Christopher Waller, identified as a potential successor should President Trump fire Chair Powell, said in remarks prepared for delivery Thursday that the central bank should cut its target range for the federal funds rate at the next Fed meeting.
"With inflation near target and the upside risks to inflation limited," Waller said, "we should not wait until the labor market deteriorates before we cut the policy rate." Waller concluded that "it makes sense" to trim the fed funds rate by 25 basis points "two weeks from now."
The quiet period for the next Fed meeting begins tomorrow and ends on Thursday, July 31. Fed staff and Federal Open Market Committee (FOMC) participants will generally refrain from speaking publicly or giving interviews during this time.
The next FOMC meeting is scheduled for July 29-30.
Fed funds futures reflect a 95.3% probability the FOMC will maintain a target range of 4.25% to 4.50%, down from 95.9% Thursday. The probability of a cut in September increased from 53.9% Thursday to 60.6% Friday.
Crypto is a $4 trillion market too
Not only did Nvidia (NVDA) become the first publicly traded company to cross the $4 trillion market capitalization barrier this week.
The total value of the cryptocurrency market exceeded $4 trillion too. Bitcoin traded at a 24-hour high of $120,689. The world's No. 1 cryptocurrency hit a new all-time high Monday above $123,000.
Cryptocurrency exchange operator Coinbase Global (COIN) hit a new all-time high too and closed up 2.2%.
COIN is a top holding in some of the best bitcoin ETFs to buy for efficient exposure to a rapidly expanding but still relatively small asset class.
The leader of the AI revolution ended the day down 0.3% but still managed to make a new intraday high. NVDA stock is now up 27.9% since its fiscal 2026 first-quarter earnings report.
Netflix and 3M beat, raise and gap down
Both Netflix (NFLX), which reported late Thursday, and 3M (MMM), which reported early Friday, beat expectations for their respective quarters, raised guidance for the full year and gapped down at the opening bell.
NFLX – perhaps one of the next stocks to split – ended the day down 5.1%. MMM was No. 30 among the 30 Dow Jones stocks after sliding 3.6%.
"Our business continues to perform well," Netflix stated in its second-quarter letter to shareholders, noting 16% revenue growth and operating margin expansion from 27% to 34%.
Revenue as well as operating income were slightly above guidance, and management raised its full-year revenue forecast to $44.8 billion to $45.2 billion and its operating margin forecast to 29.5% from 29%.
3M reported 1.4% sales growth and raised its full-year guidance for earnings to $7.75 to $8.00 from $7.60 to $7.90. Notably, updated guidance reflects the impact of Trump's tariffs.
"We delivered strong results in the second quarter, posting positive organic sales growth and double-digit EPS growth," CEO William Brown said, citing healthy trends "with all three business groups growing organically for the third quarter in a row."
Related content
- Best Low-Volatility ETFs When the Market Is a Roller Coaster
- I'm an Investing Expert: This Is How You Can Invest Like Warren Buffett
- Earnings Calendar and Analysis for This Week (July 21-25)
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
5 Types of Gifts the IRS Won’t Tax: Even If They’re BigGift Tax Several categories of gifts don’t count toward annual gift tax limits. Here's what you need to know.
-
The 'Scrooge' Strategy: How to Turn Your Old Junk Into a Tax DeductionTax Deductions We break down the IRS rules for non-cash charitable contributions. Plus, here's a handy checklist before you donate to charity this year.
-
Dow Adds 646 Points, Hits New Highs: Stock Market Today
It was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
I'm a Tax Attorney: These Are the Year-End Tax Moves You Can't Afford to MissDon't miss out on this prime time to maximize contributions to your retirement accounts, do Roth conversions and capture investment gains.
-
I'm an Investment Adviser: This Is the Tax Diversification Strategy You Need for Your Retirement IncomeSpreading savings across three "tax buckets" — pretax, Roth and taxable — can help give retirees the flexibility to control when and how much taxes they pay.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
Could an Annuity Be Your Retirement Safety Net? 4 Key ConsiderationsMore people are considering annuities to achieve tax-deferred growth and guaranteed income, but deciding if they are right for you depends on these key factors.
-
I'm a Financial Pro: Older Taxpayers Really Won't Want to Miss Out on This Hefty (Temporary) Tax BreakIf you're age 65 or older, you can claim a "bonus" tax deduction of up to $6,000 through 2028 that can be stacked on top of other deductions.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Meet the World's Unluckiest — Not to Mention Entitled — Porch PirateThis teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
