Stocks Are Down as Friday Trading Opens, Although S&P 500 Could End the Month Ahead
The S&P 500 could manage to hit a third day of consecutive record highs thanks to a good GDP report from Thursday.
Quick overview
- Federal Reserve member Lisa Cook is suing President Trump, which may hinder a potential interest rate cut.
- Despite a slight dip, major stock indices are expected to record monthly gains, with the S&P 500 significantly higher than three months ago.
- Inflation rates have remained stable, contributing to investor optimism and the possibility of a Fed interest rate cut.
- The U.S. GDP report exceeded expectations, and the S&P 500 achieved record highs for two consecutive days.
There may be some resistance to President Donald Trump’s call for a Fed interest rate cut as Federal Reserve member Lisa Cook is suing Trump for trying to fire her.
The lawsuit that Cook filed against Trump may prevent her from losing her position on the Federal Reserve and may hold the Fed back from issuing a rate cut as early as Trump and many investors would like. The stock markets dipped on Friday morning, but two indices could still record an overall monthly gain.
It is expected that the S&P 500, the Nasdaq, and the Dow Jones will all record gains for the month of August when trading finishes today. The Dow is down 0.11% for the day so far, and the S&P 500 has lost 0.41%. The Nasdaq Composite fell as well, losing 0.79% compared to the same time Thursday.
The S&P 500 Climbs Higher
The S& P 500 is significantly higher than it was three months ago. At the beginning of June, the S&P 500 had 5,930 points. It climbed to 6,200 in July and then started August at about that same level. However, the index appears to be closing off August with 6,470 points, making progress from a mostly flat July.
The three major indices are all up right now and have been gaining in recent weeks. They are able to keep climbing despite the threat of new tariffs, and countries are quickly negotiating terms with the United States over tariffs so that investors appear to have little to fear from Trump’s bevy of tariffs.
Inflation has stayed mostly flat in recent weeks. It has grown at the same 2.7% rate in July as it had in June, and that reading helped the Federal Reserve tenuously announce the possibility of an interest rate cut. The inflation numbers have also kept investors optimistic about the economy, and while some metrics are showing signs of rising costs, other metrics show that unemployment is improving and some inflation factors are getting better.
The United States’ GDP was stronger than expected when the report came in this week. Later on Friday, the personal consumption expenditures price index will be reported, helping investors and analysts better gauge where inflation is at.
On Thursday, the S&P 500 achieved a record high, which makes it the second day in a row it has done so. It may manage a third day as trading continues for Friday and the month closes off.
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