Stocks dipped lower on Friday as growing uncertainty over the next Federal Reserve Chair weighed on positive momentum from strong quarterly earnings, leading Wall Street to end the week in the red.
The Dow Jones Industrial Average (NYSE: DIA) fell 80 points to settle at 49,359.33 on Friday, while the S&P 500 Index (NYSE: SPY) and Nasdaq Composite (NASDAQ: QQQ) each ticked below the flatline to end the session at 6,940.01 and 23,515.38, respectively. All three major averages also closed out the week slightly lower, with the tech-heavy Nasdaq underperforming the boarder market with a loss of 0.4%.
Impacting sentiment, President Donald Trump said in remarks at the White House on Friday that he would rather keep National Economic Council Director Kevin Hassett in his current role instead of becoming the next central bank chair. Hassett has been a favorite on Wall Street to replace Fed Chair Jerome Powell once his term is up in May.
Stocks were coming off of a winning session on Friday, as strong earnings from semiconductor stocks and financial heavyweights boosted market optimism. That momentum slightly boiled over into Friday, as Jefferies analyst Blayne Curtis raised the firm's price target on Nvidia (NASDAQ: NVDA) to $275 from $250, implying a more than 45% potential upside for the microchip maker.
"Industry checks suggest further upside with beats continuing as Blackwell ramps," he wrote in a Friday note. "See increased systems sales with the ramp of the Rubin, further increasing the competitive moat." Curtis's base case for Nvidia sees the company as the dominant supplier of data center chips.
Elsewhere, Fed Governor Michelle Bowman said in remarks before an economic forum on Friday that policymakers could cut interest rates further this year to support a potentially weakening labor market.
"Absent a clear and sustained improvement in labor market conditions, we should remain ready to adjust policy to bring it closer to neutral," Bowman said. "We should also avoid signaling that we will pause without identifying that conditions have changed. Doing so will indicate that we are not attentive or responsive to the recent and expected path of the labor market."
Wall Street will be closed on Monday, January 19, in observance of Martin Luther King Jr. Day in the United States. Markets will be open for regular trading hours on Tuesday.