Major United States benchmark averages closed slightly lower on Friday as markets digested a fresh round of comments from U.S. President Donald Trump on the Federal Reserve and global trade, while investors also positioned ahead of a long holiday weekend.
The Dow Jones Industrial Average fell 83.1 points, or 0.2%, to 49,359.3, the S&P 500 slipped 4.5 points, or 0.1%, to finish at 6,940.0, while the Nasdaq Composite edged down 14.6 points, or 0.1%, to 23,515.4.
In contrast, the small-cap Russell 2000 closed at a record high and gained 2.04% for the week.
Trading volumes were lighter as investors refrained from taking large positions ahead of the Martin Luther King Jr. Day holiday, with U.S. markets closed on Monday.
The major averages fell to session lows after Trump told reporters at the White House that he preferred National Economic Council Director Kevin Hassett to remain in his current role, signalling he may not be chosen as the next Federal Reserve chair.
“I actually want to keep you where you are, if you want to know the truth,” Trump said.
Hassett had been viewed as a leading contender to replace Fed Chair Jerome Powell, whose term expires in May. Following Trump’s remarks, prediction markets showed former Fed Governor Kevin Warsh moving ahead in the race.
Traders regard Hassett as the more market-friendly candidate, expecting him to be more inclined than Warsh to keep interest rates lower.
Equities had been coming off a strong prior session, led by chipmakers. Taiwan Semiconductor surged after posting a strong fourth-quarter earnings report, while sentiment was further boosted by a trade agreement under which Taiwanese chip and technology firms will invest at least US$250 billion in U.S. production capacity.
For the week, Taiwan Semiconductor lifted 5.8%, Broadcom lifted 2%, and Advanced Micro Devices added 1.7%.
Bank stocks underperformed over the week despite solid earnings results, weighed down by concerns over Trump’s calls to cap credit card interest rates.
JPMorgan Chase and Bank of America each fell about 5.1% and 5.2% for the week, respectively.
Investors navigated a volatile week dominated by headlines from Washington, including concerns over threats to the Fed’s independence and rising geopolitical tensions involving Iran and Greenland.
Risk sentiment was further unsettled on Friday after Trump said the U.S. could impose tariffs on countries “if they don’t go along with Greenland”.
For the week, the S&P 500 fell 0.4%, the Dow declined 0.3%, and the Nasdaq dropped 0.7%.
Attention now turns to a busy earnings calendar, with major companies including Netflix, Johnson & Johnson, and Intel set to report in the coming days.
On the bond markets, U.S. Treasury yields rose, with the 10-year yield up 1.3% to 4.227% and the 2-year yield 0.7% higher at 3.594%.
