The S&P 500 ended lower on Friday but still recorded a weekly gain as investors weighed concerns about persistent inflation following comments from Federal Reserve Chair Kevin Warsh.
The broad-market index fell 0.25% to close at 7,711.76, while the Nasdaq Composite dropped 0.52% to 26,402.42, pressured by declines in semiconductor stocks including Nvidia and Intel. The Dow Jones Industrial Average slipped 9.45 points, or 0.02%, to finish at 53,559.99.
Despite Friday’s losses, the S&P 500 gained 0.5% for the week, while the Nasdaq advanced 0.9%. The Dow also rose 0.5%, marking its first weekly gain in three weeks.
Speaking at the Federal Reserve’s annual Jackson Hole symposium in Wyoming, Warsh said recent PCE and CPI inflation readings, although better than expected, had not provided enough evidence that underlying inflation pressures were improving significantly. He stressed that policymakers need greater confidence that inflation is moving toward the Fed’s target at a sufficient pace.
His comments prompted a sharp shift in interest-rate expectations. According to CME Group’s FedWatch tool, futures markets were pricing in a 57.5% probability of a September Fed rate hike on Friday, up significantly from 35.4% the previous day.
Treasury yields, particularly at the short end of the curve, moved higher following Warsh’s remarks as investors reassessed the outlook for monetary policy. Longer-term yields remained relatively steady, although elevated long-term borrowing costs continue to be a concern for financial markets.
Investors also focused on corporate earnings. Gap shares surged around 13% despite a mixed quarterly report after the company announced a new chief executive for its struggling Old Navy brand. Meanwhile, Marvell Technology shares fell more than 10% after its current-quarter gross-margin guidance came in below Wall Street expectations.
