NEW YORK (AP) — United States. Stocks were mixed on Friday, pulled in opposite directions by contradictory waves of optimism and anxiety.
Several large U.S. banks said their summer profits were better than feared, raising hopes for an earnings season that could bring the first growth in a year. But at the same time, concerns about the recent war in Gaza caused oil prices to soar and U.S. Treasury yields to fall.
The push and pull pushed the S&P 500 up 0.2% in morning trading. As of 10:30 a.m. ET, the Dow Jones Industrial Average was up 160 points, or 0.5%, while the Nasdaq Composite was down 0.2%.
The strongest move was in the oil market, where a barrel of benchmark U.S. crude oil rose 4% to 86. It became 23 dollars. Brent crude oil, the international standard, rose 3.5% to $88.98 per barrel.
The United Nations says Israeli forces have ordered evacuations to northern Gaza ahead of an expected ground invasion against the ruling group Hamas, saying evacuating so many people at once could have dire consequences. he warned.
Although the region is not a major oil producer, there are concerns that the violence could spill over into the politics surrounding oil markets and ultimately disrupt oil flows.
Concerns about war also pushed yields on U.S. Treasuries lower, as often happens in times of stress when investors turn to safer investments. The yield on the 10-year U.S. Treasury note fell to 4.63% from 4.70% late Thursday.
Yields also fell after another Fed official said the central bank could end raising key interest rates following a ferocious campaign that began early last year.
Philadelphia Fed President Patrick Harker reiterated Friday that he believes “we are at a point where we can keep interest rates where they are” as long as economic and financial conditions continue on their current course.
The Fed lowered the overnight interest rate from virtually zero early last year to its highest level since 2001, hoping for inflation due to fuel hunger. Inflation has fallen from its peak last summer but remains above the Fed’s 2% target, raising concerns that interest rates will remain higher than Wall Street would like. There is.
High interest rates and long-term bond yields depress the prices of all types of investments, while slowing down the overall economy.
Harker said the Fed has the luxury of holding off on raising rates and seeing what happens, especially with so much economic uncertainty. In addition to the war in Gaza and oil prices, there are also concerns about the impact of worker strikes across the United States and the possibility that a dysfunctional Capitol Hill could lead to another U.S. government shutdown.
“If we do nothing, we’re still doing something,” Harker said of keeping interest rates high and stable. “And actually, we do quite a lot.”
The yield on the two-year Treasury note, which tends to roughly track expectations for Fed action, fell to 5.02% from 5.07% late Thursday.
Friday’s report suggested that U.S. consumer sentiment, where spending has been one of the main drivers keeping the economy out of recession, may be weakening. Consumer sentiment worsened more than economists expected, mainly due to rising concerns about inflation, according to a preliminary report from the University of Michigan.
U.S. consumers expect inflation to reach 3.8% over the next year, up from 3.2% last month. This is the highest level since May.
Contributing to Wall Street’s support were JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co., all of which reported stronger summer profits than analysts expected.
JPMorgan Chase & Co. rose 3.2% after third-quarter profit rose 35% from a year earlier. The company benefited from rising interest rates, but CEO Jamie Dimon also warned that “this may be the most dangerous time the world has seen in decades.”
Citigroup rose 2%, and Wells Fargo similarly rose 3.4% after summer profits beat analysts’ expectations. As consumers spend more on credit cards, bank customers continue to borrow despite higher interest rates.
UnitedHealth Group also beat Wall Street’s profit expectations, sending its stock up 2.2%.
Dollar General had the biggest gain in the S&P 500, rising 8.2% after Todd Vasos announced he would return as CEO.
The losers on Wall Street were travel companies. Norwegian Cruise Line fell 3.5% and Delta Air Lines fell 1.6%.
Investment giant BlackRock fell 0.3% despite announcing its latest quarterly profit was better than analysts expected.
BlackRock said all the uncertainty surrounding financial markets and the outlook for interest rates is causing clients to pull some money out of long-term investments and hide it in cash, ultimately resulting in higher yields.
In overseas stock markets, indexes fell across Europe following a sharp decline in stock prices in Asia.
Benchmark stock prices in Hong Kong fell 2.3% and stocks in Shanghai fell 0.6% as China’s economic recovery continues to stall.
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Associated Press writer Zimo Zhong contributed.
