S&P 500 Volume Spikes at the End of a Wild Week on Triple Witching – US Market Wrap

A jittery week ended with stock losses as investors weighed geopolitical and trade developments; chipmakers fell, while a $6.5 trillion options expiration fueled a surge in volume. Bonds recovered from their lows after Federal Reserve President Christopher Waller said interest rates could fall as early as July.

Even signs that the US is considering diplomacy as a means of de-escalating the conflict between Israel and Iran failed to calm nerves ahead of the weekend. Equities also fell after the Financial Times reported that Japan had canceled a high-level meeting with the US because the Trump administration had told Tokyo to increase defense spending. A closely watched index of chipmakers fell nearly 1% following a Wall Street Journal report that the US may revoke waivers for allies with semiconductor plants in China.

Waller reiterated his belief that the inflationary effects of tariffs will be temporary. His remarks on CNBC came after the Fed decided to keep interest rates unchanged for the fourth time in a row. Meanwhile, Richmond Fed President Barkin said there is no rush to cut interest rates in the face of tariff risks to inflation as the job market remains strong.

Money markets have slightly increased their bets on a September Fed cut, while an October move remains fully priced in. Fed officials kept interest rates unchanged Wednesday, as they have all year, as they try to understand how Trump’s policies will affect the economy.