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Stocks Fall Ahead of Powell’s Address with a Potential for a Winning Streak

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The New York Stock Exchange on the Wall street in New York, NY.

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Investors saw red on Friday, as major market averages experienced a downturn ahead of a double whammy from Fed chief Jerome Powell. The potential for a five-week winning streak lingers on amid a historic November rally. The Nasdaq Composite (COMP.IND) fell by 0.5%, the S&P 500 (SP500) dropped by 0.2%, and the Dow (DJI) remained flat.

The broader market’s performance for the week showed a 0.2% gain for the S&P (SP500), a 0.2% dip for the Nasdaq (COMP.IND), and a 1.6% rise for the Dow (DJI).

Fed chief Jerome Powell’s address at Spelman College carries a weight of consequence, having been preceded by major market movements since his earlier statement about tight financial conditions. Market analysts are keen on his potential response to these moves. The 10-year Treasury yield (US10Y) saw a 1 basis point increase to 4.34%, while the 2-year yield (US2Y) gained 2 basis points to 4.70%.

The rising yield has invoked comments from ING, stating that the current rate discount is expected to deepen further. The upcoming November ISM manufacturing index, alongside the October construction spending numbers, also impact market sentiment. UBS’ Paul Donovan noted that while sentiment polls might suggest a bleak manufacturing outlook, the reality of stable US manufacturing output could tell a different story.

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