Risk aversion dominated Wall Street in the final session of the week, driving sharp losses across major indices.

Investors grappled with growing uncertainties surrounding the economic impacts of Donald Trump's policies and the Federal Reserve’s next moves.

Fed Chair Jerome Powell's remarks from the previous day weighed heavily on risk assets. Powell signaled no need to lower rates, citing the economy's resilience and emphasizing the importance of fully finishing the inflation jobs.

Boston Fed President Susan Collins added to the uncertainty on Friday, stating she needs to see additional data before deciding on further rate cuts at the Federal Reserve’s upcoming policy meeting.

Expectations for a 25-basis-point rate cut in December were significantly scaled back, with odds falling to 59%, down from 82% just a day earlier.

U.S. indices are poised to end the week in negative territory, as optimism fueled by Trump's win fizzled. Tech stocks were hit hardest, with the Nasdaq 100 plunging 2.5%, wiping out its post-election gains.

Chipmakers tumbled across the board, with the iShares Semiconductor ETF (NASDAQ:SOXX) reaching a 2-month low, as Applied Materials Inc. (NASDAQ:AMAT) released a disappointing outlook.

The surge in rate-cut uncertainty and broader economic concerns pushed the CBOE Volatility Index (VIX) up by more than 17%, reflecting heightened market fear.

Treasury yields edged lower, indicating a flight to safe-haven bonds. The drop in yields supported the Japanese yen, which ended a four-day losing streak.

The U.S. dollar eased but remains on track for its seventh consecutive week of gains, marking its longest winning streak since September 2023.

Gold prices remained flat despite falling yields and a softer dollar, failing to act as a hedge in a turbulent session. Meanwhile, Bitcoin (CRYPTO: BTC) defied the risk-off sentiment, rising 2.5% to $89,600 in a surprising show of strength.

Friday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust (NYSE:SPY) fell 1.4% to $585.28.
• The SPDR Dow Jones Industrial Average (NYSE:DIA) fell 0.8% to $434.08.
• The tech-heavy Invesco QQQ Trust Series (NASDAQ:QQQ) fell 2.5% to $496.12.
• The iShares Russell 2000 ETF (NYSE:IWM) tumbled 1.4% to $228.75.
• The Utilities Select Sector SPDR Fund (NYSE:XLU) outperformed, rising 0.8%. The Technology Select Sector SPDR Fund (NYSE:XLY) lagged, down 2.7%.

Friday’s Stock Movers

• Palantir Technologies Inc. (NYSE:PLTR) skyrocketed 8.4%, on news that the AI-champion will be included in the Nasdaq 100 index.
• Walt Disney Co. (NYSE:DIS) rose over 4%, fueling stock momentum after the 6.2% gain on Thursday amid stronger than expected earnings.
• Alcoa Corp. (NYSE:AA) rallied over 8% after China announced to end its export-tax rebate for aluminum from Dec. 1.

Stocks reacting on earnings reports were:

• Globant S.A. (NYSE:GLOB), down 11%.
• AST SpaceMobile Inc. (NASDAQ:ASTS), down 13.8%,
• Post Holdings Inc. (NYSE:POST), down 2.8%.

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