Stock traders faced a balancing act between the fear of missing out and concerns about an overbought market. The S&P 500 halted its daily winning streak on Friday but still saw its best week since March, closing over 2.5% higher. Tech stocks had mixed performance on Friday with chip makers weighed down by Micron Technologies, but the Nasdaq still managed to close up 3.25% for the week. Wall Street had an interesting moment with a massive options expiration event worth trillions of dollars, impacting trading and causing the market’s volatility to climb along with the S&P 500 throughout the week before fading on Friday.
Shorter duration U.S. government yields climbed this week, while the longer duration yields remained relatively flat. The Fed held interest rates at 5.0% and 5.25% this week, while making it clear that further rate hikes will likely be necessary and pointed to a 5.6% peak rate. In Europe, the ECB raised interest by 25bps this week, while signaling that more tightening will be necessary as inflation remains elevated.
Crude oil prices rose on Friday and ended the week up 2.4% due to optimism about higher refinery demand and expectations of economic stimulus in China. Russia’s Energy Minister also expressed optimism, predicting a return of crude prices to around $80 per barrel. West Texas Intermediate Crude oil futures closed at $71.78 a barrel, while Brent crude futures climbed to $76.70 a barrel. Factors such as Europe’s diesel premium surge and increased crude imports in China contributed to the positive outlook for oil.