Wall Street drifts near records as it heads for the finish of a winning week
Wall Street is drifting on Friday toward the finish of its third winning week in the last four, as more big U.S. companies deliver stronger profits for the spring than analysts expected.
The S&P 500 was 0.2% higher in early trading after setting its all-time high the day before. The Dow Jones Industrial Average was down 25 points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was up 0.4% after coming off its own record.
Norfolk Southern chugged 2.6% higher after an AP source said it's talking with Union Pacific about a merger to create the largest railroad in North America, one that would connect the East and West coasts. Any such deal, though, would likely face tough scrutiny from U.S. regulators. Union Pacific's stock slipped 0.5%.
Netflix, meanwhile, fell 4.7% despite reporting a stronger profit for the latest quarter than Wall Street expected. Analysts said it's not a surprise the stock was sluggish after it had already soared 43% for the year so far, coming into the day. That's six times more than the gain for the S&P 500.
Chevron climbed 1.3% after saying it had completed its acquisition of Hess. The buyout got its go-ahead following a favorable arbitration ruling in Paris about some of Hess' assets off Guyana's coast.
Stronger-than-expected profit reports for the spring also helped several stocks to rally. Charles Schwab climbed 4.4%, and Comerica rose 2.3%.
In the bond market, Treasury yields eased ahead of a report coming Friday morning about how U.S. consumers are feeling about the economy and about inflation.
The yield on the 10-year Treasury sank to 4.42% from 4.47% late Thursday. The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do with its short-term rates, also dropped. It fell to 3.86% from 3.91%.
A top Fed official, Gov. Chris Waller, said late Thursday that the Fed should cut its overnight interest rate as soon as its next meeting in a couple weeks. That follows sharp criticism from President Donald Trump, who has been castigating the Fed for holding interest rates steady this year instead of cutting them, as it did late last year.
Lower rates could give the economy a boost, and Trump has also implied they could help the U.S. government save money on its debt payments, though that's uncertain. The interest rates Washington has to pay on its longer-term debt can depend more on what bond investors think than on what the Fed does, and they can even move in opposite directions.
The chair of the Fed, meanwhile, has been insisting that he wants to see more data about how Trump's tariffs will affect the economy and inflation before the Fed makes its next move. The downside of lower interest rates is that they can give inflation more fuel, and prices may already be starting to feel the upward effects of tariffs.
Traders on Wall Street still think it's more likely that the Fed will resume cutting interest rates in September, rather than later this month, according to data from CME Group.
In stock markets abroad, indexes were mixed across Europe and Asia. Hong Kong's Hang Seng jumped 1.4%, but Tokyo's Nikkei 225 slipped 0.2% ahead of an election for the upper house of parliament on Sunday that could wipe out the ruling coalition's upper house majority.
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Trump, as he does in many of his appearances, veered off topic as he fielded questions from reporters. In response to a question about his Justice Department's decision to interview Jeffrey Epstein's former girlfriend, Trump repeated falsehoods about his loss to Democrat Joe Biden in the 2020 presidential election and the Russia investigation during his first term, along with comments about targeting adversaries such as former President Barack Obama and former Secretary of State Hillary Clinton. "After what they did to me, whether it's right or wrong, it's time to go after people," Trump said. Relations with China are top of mind When asked how he plans to balance his country's relationships between the U.S. and China, Marcos said there was no need to balance "because our foreign policy is an independent one." "Our strongest partner has always been the United States," said Marcos, whose country is one of the oldest U.S. treaty allies in the Pacific region. On Tuesday, when asked about the U.S. defense commitment to the Philippines, Chinese Foreign Ministry spokesperson Guo Jiakun said, "Whatever cooperation the U.S. and the Philippines have, it should not target or harm any third party, still less incite confrontation and heighten tensions in the region." China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan have been involved in long-unresolved territorial conflicts in the South China Sea, a busy shipping passage for global trade. The Chinese coast guard has repeatedly used water cannons to hit Filipino boats in the South China Sea. China accused those vessels of entering the waters illegally or encroaching on its territory. Marcos also met Secretary of State Marco Rubio and Defense Secretary Pete Hegseth this week. At the Pentagon on Monday, Marcos told Hegseth that the assurance to come to each other's mutual defense "continues to be the cornerstone of that relationship." 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"Do whatever you need to do," Trump told Marcos. "But your dealing with China wouldn't bother me at all."
