FX.co ★ U.S. Stocks Regain Ground After Early Weakness, Dow Turns Positive

**Stock Market Rebounds After Early Decline, Closing Mixed**

The stock market experienced a recovery on Friday, reversing early session losses and showing mixed performance by the close. The Dow Jones Industrial Average managed to climb into positive territory.

As it stands, the key indices display varied results: the Dow is up 63.68 points, or 0.2%, at 42,088.87; the Nasdaq is down 52.06 points, or 0.3%, at 17,961.93; and the S&P 500 has fallen 10.29 points, or 0.2%, to 5,703.35.

**Initial Weakness**

The early dip in stock prices can be attributed to profit-taking activities, where traders chose to capitalize on the previous day's significant gains. On Thursday, both the Dow and the S&P 500 closed at record highs, buoyed by the Federal Reserve's announcement of a half-percentage point interest rate cut.

**Market Dynamics**

As the session progressed, selling pressure lessened, with traders hesitant to make substantial moves pending identification of new market catalysts following the Fed's rate cut. The absence of major U.S. economic data also contributed to a cautious trading environment, as traders await key reports expected next week.

Even though the Fed has indicated continued rate reductions in the coming months, upcoming data could still influence market sentiment. Focus will be on reports related to durable goods orders, new home sales, consumer confidence, and personal income and spending, which includes the Fed's preferred inflation gauge.

**Sector Performance**

Transportation stocks displayed significant weakness, leading the Dow Jones Transportation Average to decline by 3.0%, despite closing at a year-high in the previous session. Shares of FedEx (FDX) tumbled by 13.7% following disappointing fiscal first-quarter earnings and a downward revision of its full-year guidance, heavily impacting the sector.

Semiconductor stocks also exhibited considerable weakness, with the Philadelphia Semiconductor Index dropping by 1.9%. Steel and housing stocks faced notable declines as well, while gold and networking stocks showed strong upward movements.

**International Markets**

Asian-Pacific stock markets mostly trended higher on Friday. Japan's Nikkei 225 Index saw a 1.5% increase, and Hong Kong's Hang Seng Index rose 1.4%.

Conversely, European markets experienced declines. The U.K.'s FTSE 100 Index fell by 1.2%, and both France's CAC 40 Index and Germany's DAX Index decreased by 1.5%.

**Bond Market**

Treasuries modestly advanced through the session, recovering from early losses. Consequently, the yield on the benchmark ten-year note, which inversely correlates with its price, dropped 1.8 basis points to 3.722%.