Dow Jones lags on expectations for Fed policy tightening

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Dow Jones lags on the weakening of the industrials sectors for this week.

On Friday, the stock indexes in the U.S. market decreased slightly after inflation data calmed fears over the imminent policy tightening of the Federal Reserve.

The S&P 500 traded just below a record high of 4,249.74, with the most sophisticated technology stocks serving as a heavyweight boost. Sectors such as economics and money that stand to benefit in this year from an economic bounceback also supported the index.

Investors scaled back expectations for Fed policy tightening after the markets' April consumer price data indicates that a recent spike in inflation would be transitory.

Much of the price surge in May came from commodities and flying markets and it is expected to be temporary.

With recent data indicating weakness in the labor market, the Fed is expected to keep its positive policy at its next meeting next week, which is mostly positive for stocks and other risk-driven assets.

The commentary will be that they are still focusing on the last two employment reports, which were much weaker than expected. And so the Fed will have to wait for additional data before even talking about tapering, said Sam Stovall, Chief Investment strategist at CFRA Research in New York.

This meeting and the next meeting in late July could possibly result in no policy changes or even consideration of policy changes.

At 9 : 45 a.m. ET, the Nasdaq Composite was up 87.44 points or 0.25% at 34,553. 68, the Dow Jones Industrial Average rose 4.54 points or 0.15% at 4,245. 72, and the S&P 500 was up 19.12 points or 0.14% at 14,039. 46

The S&P 500 and the Nasdaq were set for substantial gains as a lack of major catalysts and a summer lull in trading saw them move in a reasonable weekly range.

But weakness in industrial stocks saw Dow Jones set for a weekly loss amid doubts over whether President Joe Biden's $2.3 billion infrastructure bill would pass.

On Friday, the S&P industrials sector lost, but rose for the week.

Cruise operators were in early trading, with shedding of 1.6% after two guests on its Celebrity Millennium ship tested positive for COVID 19.

Stocks favoured by small investors that dominated trading volumes in recent weeks were expected to close higher for the week, even as a rally appeared to be running out of steam on Thursday. Most of the so-called meme stocks rose on Friday.

Boosters of downed equity issued by a 2.17 to 1 ratio on Nasdaq and a 1.90 to 1 ratio on the NYSE outnumbered advancers

The Nasdaq index recorded 18 new 52 week highs and one new low, while the S&P CB recorded 50 new highs and six new lows. When is a week, it is usually a bit earlier than expected.

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