The S&P 500, Dow Jones, and Nasdaq closed slightly lower on Friday. Bond yields rose after Trump expressed hesitancy to nominate Kevin Hassett as Fed Chair, dampening expectations of rate cuts. Stocks initially rose led by chipmakers predicting continued AI spending. Earnings season remains positive with 89% of S&P 500 companies beating expectations.

The Supreme Court did not rule on Trump’s tariffs challenge. Odds of a -25 bp rate cut at the FOMC’s next meeting are discounted at 5%. Overseas markets settled lower, with European bond yields rising. ECB’s Lane sees no near-term interest rate debate. Swaps predict a 1% chance of a rate hike at the ECB’s next meeting.

Chip makers surged on optimism for AI spending, with TSMC boosting capital expenditure forecasts. Power supplies fell due to Trump’s push for an emergency electricity auction. State Street shares dropped despite positive Q4 earnings. Mosaic cited lower phosphate market shipments. Several other stocks, including Kraft Heinz and GE Vernova, closed lower or higher.

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