By Stephen Culp
NEW YORK (Reuters) -Wall Street dipped and Treasury yields bounced on Friday as chipmakers and auto stocks outweighed a string of robust economic data, providing a downbeat ending to a generally upbeat week.
All three major U.S. stock indexes were red after the starting bell, with the Philadelphia SE semiconductor index weighing heaviest on the tech-laden Nasdaq, while a strike launched by the United Auto Workers union (UAW) helped fuel the sell-off.
Still, all three indexes remained on a path to weekly gains.
The fell in the wake of a Reuters report that Taiwan’s TSMC asked major suppliers to delay delivery of high-end chipmaking equipment.
A simultaneous strike by UAW workers at three strategic plants weighed on General Motors Co (NYSE:), Ford Motor (NYSE:) Co and Chrysler parent Stellantis NV (NYSE:).
On the economic front, data released on Friday was generally better than analysts expected, with industrial production breezing past consensus and University of Michigan consumer inflation expectations cooling.
This has cemented expectations that the Federal Reserve will leave its key interest rate unchanged at the conclusion of next week’s monetary policy meeting, and fueled hopes that the central bank’s tightening cycle might have run its course.
“If we get a pause in September and November, that could lead to a nice year-end rally, which will feed the belief that the next move by the Fed will be a rate cut in 2024,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
“There is a real chance that by dumb luck this Federal Reserve is going to be able to thread the needle and achieve a soft landing,” Pavlik added.
The fell 157.56 points, or 0.45%, to 34,749.55, the lost 37.64 points, or 0.84%, to 4,467.46 and the dropped 178.02 points, or 1.28%, to 13,748.04.
European stocks extended a rally sparked by the European Bank signaling an end to its rate-hiking cycle, boosted by better-than-expected Chinese economic data.
The STOXX 600was on track for a weekly gain.
The pan-European index rose 0.33% and MSCI’s gauge of stocks across the globe shed 0.38%.
Emerging market stocks rose 0.31%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.59% higher, while rose 1.10%.
Treasury yields rose ahead of the Federal Reserve policy meeting next week as robust economic data stoked worries that restrictive interest rates will be in place for longer than expected.
Benchmark 10-year notes last fell 7/32 in price to yield 4.3164%, from 4.29% late on Thursday.
The 30-year bond last fell 9/32 in price to yield 4.4026%, from 4.385% late on Thursday.
The dollar gave up some of its recent gains against a basket of world currencies, but remained on track for its ninth weekly gain.
The fell 0.16%, with the euro up 0.2% to $1.0662.
The Japanese yen weakened 0.22% versus the greenback at 147.79 per dollar, while Sterling was last trading at $1.2395, down 0.11% on the day.
Oil prices appeared set to notch their third consecutive weekly gain on supply tightness and optimism that the Chinese economy is gaining strength.
rose 0.6% to $90.70 per barrel and was last at $93.95, up 0.27% on the day.
Gold prices surged, bouncing off three-week lows in opposition to softness in the greenback.
added 1.0% to $1,928.70 an ounce.
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