U.S. Stocks Resilient in Week of Surprises as VIX Stays QuietBy
A week marked by surprises, from a U.S. missile strike in Syria to a jobs report that was the weakest in almost a year, did little to rattle U.S. equities sitting near record levels.
Against a backdrop of rising geopolitical tensions and uncertainty over the Donald Trump administration’s approach to financial regulation, volatility remained muted in the stock market. The VIX tallied its 103rd session below 15, the longest streak since February 2007, according to Bloomberg data.
The S&P 500 Index fluctuated between gains and losses throughout the week before ending 0.3 percent lower. The Dow Jones Industrial Average finished the five days virtually unchanged, while small-cap shares in the Russell 2000 Index posted their third weekly loss of at least 1 percent in the past month.
“While investors may be struggling to find reasons to get into the market, they also realize the reasons to sell are limited,” strategists at Voya Investment Management said in a note Friday.
Gains in energy and real estate companies offset losses in financial firms and consumer discretionary shares on the week as commodity prices advanced and investors shifted to so-called “defensive” stocks like utilities and consumer staples. Banks and brokerages lost 1 percent for the fourth weekly decline in five.
Bonds strengthened for a fourth week and gold advanced as the Trump administration executed a cruise missile strike in Syria, the Federal Reserve indicated in its minutes that a wind-down of the central bank’s balance sheet could begin later this year, and payroll numbers came in at about half of what economists expected.
At the same time, investors continue to assess the likelihood of regulatory overhaul by President Donald Trump. White House economic adviser Gary Cohn said Friday that separating Wall Street’s investment and retail banking operations would boost lending by eliminating the need for burdensome regulations.