NEW YORK: The S&P 500 edged higher in choppy trading ahead of the long weekend on Friday, helped by gains in chip stocks as Wall Street looked to round up a whipsaw week that ushered in the start of the fourth-quarter earnings season.
Memory chipmakers Micron and Seagate Technology gained 5.6 percent and 2.2 percent, building on their searing rallies in 2025 on enthusiasm over AI demand.
The US stock indexes gradually moved lower while Treasury yields ticked up after President Donald Trump said he may want to keep economic adviser Kevin Hassett in his current role, lowering market bets that Hassett would succeed Fed Chair Jerome Powell.
Odds of former Fed governor Kevin Warsh becoming the next Fed chair rose to 57 percent, from 44 percent on Polymarket, replacing Hassett - a prominent voice pushing for lower rates as the leading contender for the Fed’s top job.
Investors this week have also had to contend with worries over the Federal Reserve independence after Powell said US prosecutors had threatened to indict him. Hassett, however, played down the probe saying he expected there would be “nothing to see here”.
“The administration seems to be backing off some of that (Fed rhetoric),” said John Belton, portfolio manager at Gabelli Funds, adding that “any attempts to undermine Jerome Powell may seem to be backfiring.”
US stocks were limping toward modest weekly losses, even after the S&P 500 and the Dow punched out fresh record closes on Monday.
Worries over the fallout of a proposed one-year cap on credit card interest rates at 10 percent weighed on lenders’ shares and broader markets despite strong quarterly showings from big US banks.
Financials sector was headed for their worst week since October.
At 11:42 a.m. ET, the Dow Jones Industrial Average rose 5.48 points, or 0.01 percent, to 49,447.92, the S&P 500 gained 10.29 points, or 0.15 percent, to 6,954.76 and the Nasdaq Composite gained 40.78 points, or 0.17 percent, to 23,570.80.
Investors were also cautious of making big bets ahead of the long weekend, with the stock market shut on Monday for the Martin Luther King Jr. holiday.
Consumer staples, real estate and utilities - largely considered defensive sectors - were on top of the leaderboard for weekly gains.
The week also saw money shifting out of some heavyweight tech names into more undervalued areas, with the S&P 600 small-cap index and the Russell small-cap 2000 index set to gain about 2 percent each this week.
The earnings season ramps up next week with reports from heavyweights including Netflix, Johnson & Johnson and Intel.
Meanwhile, fresh data showed US factory production unexpectedly increased in December.
Fed official Michelle Bowman said a fragile job market that could weaken quickly means the US central bank should stand ready to cut interest rates again if needed.
Independent power producers dropped after a report said US states seeing a rapid expansion in data center construction will sign an agreement with the Trump administration intended to curb rising electricity costs.
Talen Energy slumped 6 percent, while Constellation Energy and Vistra fell 5 percent and 9 percent, respectively.
Declining issues outnumbered advancers by a 1.44-to-1 ratio on the NYSE and by a 1.17-to-1 ratio on the Nasdaq.
The S&P 500 posted 23 new 52-week highs and six new lows, while the Nasdaq Composite recorded 46 new highs and 28 new lows.