US stocks experienced a mixed session on Friday following a week of volatility, driven by growing optimism for a potential interest rate cut in December. Bitcoin continued its downward trend, as concerns related to artificial intelligence continued to impact investor sentiment.
The tech-heavy Nasdaq Composite fell by 0.7%, while the S&P 500 decreased by 0.2%, reversing earlier gains from the session. Conversely, the Dow Jones Industrial Average managed to increase by nearly 0.3%. This market fluctuation comes a day after a significant decline on Thursday.
Early Friday, U.S. equities received a boost after New York Fed President John Williams indicated there may be room for an interest rate cut in the near future. This pronouncement heightened expectations for a rate cut during the Fed’s upcoming meeting, with traders now estimating a 75% likelihood of a December reduction, up from around 40% just a day prior. Williams’ comments highlight the internal divisions within the Federal Reserve as it approaches its last meeting of the year.
While the stock market fluctuates, cryptocurrencies appear to be facing even greater challenges. Bitcoin plunged on Friday, hitting lows of around $82,000, marking a significant drop from its record highs only a month ago. This decline has positioned Bitcoin for its worst month since the cryptocurrency market’s collapse in 2022.
The broader market is also bracing for a tough month, with the S&P 500 on track to experience its worst November since 2008, amid growing apprehensions about a potential “bubble” fueled by artificial intelligence. Despite Nvidia’s strong earnings report, concerns persisted, failing to assuage fears among investors that AI-related stocks might be overvalued.
All major U.S. stock indices are set to conclude the week with losses. The S&P 500 and Nasdaq are poised for declines of more than 2% and 3%, respectively, while the Dow faces a drop exceeding 2%.
Consumer confidence data from the University of Michigan revealed a further dip in sentiment for November, dropping to a reading of 51, underscoring concerns over rising prices and potential job losses. Additional comments from other Federal Reserve officials scheduled for Friday may shed more light on the central bank’s future rate direction.