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US stocks ended the week higher even as AI trading showed signs of exhaustion.
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The Dow Jones led this week with a 1.5% gain, while the S&P 500 and Nasdaq 100 rose about 0.5%.
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Some economists are calling on the Fed to cut rates in July as the risk of a recession increases.
U.S. stocks closed mixed on Friday but ended the week higher even as artificial intelligence trading showed signs of stumbling.
The Dow Jones Industrial Average topped the market this week, rising nearly 2%. The S&P 500 and Nasdaq 100 ended the week about half a percent higher.
The meteoric rise in Nvidia stock provided a breather Thursday and Friday, with the stock down about 10% from its intraday high of $140.76.
Other hot AI stocks such as Broadcom, Dell and Super Micro Computer also fell between 1% and 3% during Friday’s trading session.
Investors are paying close attention to new economic data as murmurs grow about a possible Federal Reserve rate cut in July following a spike in weekly jobless claims.
According to the CME FedWatch Tool, a rate cut in July currently has a probability of only 10%, although one economist puts the probability of a cut at the July policy meeting closer to 60%.
Such a move by the Federal Reserve would ensure that an economic recession does not occur, as inflation is continually falling.
Economist Claudia Sahm told CNBC on Friday that the Fed was “playing with fire” by keeping interest rates high for longer.
“My starting point is no recession,” Sahm said. “But it’s a real risk, and I don’t understand why the Fed is pushing that risk. I’m not sure what they’re waiting for.”
Here’s where the US indexes stood at 4pm on Friday:
Here’s what else happened today:
In commodities, bonds and crypto:
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West Texas Intermediate crude fell 0.78% to $80.66 a barrel. Brent crude, the international benchmark, fell 0.60% to $85.20 per barrel.
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Gold fell 1.46% to $2,334.50 an ounce.
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The yield on ten-year government bonds remained stable at 4.26%.
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Bitcoin fell 1.25% to $64,034.
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