U.S. stocks ticked down Friday as traders digested fresh economic data that indicated slowing inflation, as well as better-than-expected consumer sentiment figures. Traders also wrapped up a strong first half of 2024.

The S&P 500 slid 0.41% to close at 5,460.48, while the Nasdaq Composite declined 0.71%, ending at 17,732.60. The two averages hit new all-time intraday highs earlier in the session before pulling back. The Dow Jones Industrial Average dropped 45.20 points, or 0.12%, to settle at 39,118.86.

Inflation in May slowed to its lowest annual rate in more than three years, the Commerce Department reported on Friday. The core personal consumption expenditures price index, which excludes the more volatile food and energy prices, rose just 0.1% last month and 2.6% from the prior year. Both estimates were in line with the Dow Jones consensus estimates. The core PCE index is the Federal Reserve's preferred inflation measure. Headline PCE, which includes food and energy, was flat on the month and up 2.6% on an annual basis, also in line with expectations.

"From the market's perspective, today's PCE report was near perfect," said David Donabedian, chief investment officer of CIBC Private Wealth U.S. "This was unambiguously a positive report."

The University of Michigan consumer sentiment index for June came in higher than expected, rising to 68.2 from the preliminary 65.6 reading. The one-year inflation outlook fell to 3% from 3.3% expected in May.

Inflation stats have been considered paramount by markets participants as they try to guess when the Federal Reserve will begin cutting interest rates. Traders are currently pricing in a 64.1% chance the central bank will lower rates at its September meeting, according to the CME Group FedWatch Tool.

The market officially concluded the first six months of 2024 with Friday's closing bell.

The technology-heavy Nasdaq led the way over the first half, climbing 18.1% as the artificial intelligence craze captured investor excitement. The broad S&P 500 jumped 14.5%, while the blue-chip Dow lagged with a gain of about 3.8%. Nvidia shares inched down 0.4% on Friday.

The AI theme has "taken over this entire year and really propelled the concentration in the overall market," said Mike Dickson, head of research and quantitative strategies at Horizon Investments. "That's resulted in a really strong year."

Part of the reason for the Dow's underperformance stems from an idiosyncratic pullback in the second quarter. The Dow slipped 1.7% during the period, while the S&P 500 and Nasdaq added 3.9% and 8.3%, respectively, during the same timeframe.

All three have gained ground in June, marking their seventh positive month in eight. The Nasdaq once again led the pack with a month-to-date rally of nearly 6%. The S&P 500 and Dow gained 3.5% and 1.1%, respectively.

Week to date, the Nasdaq added 0.2%. The S&P 500 and the Dow inched lower by less than 0.1%.

"Equity markets have been resilient" in the first half of the year, said John Luke Tyner, portfolio manager at Aptus Capital Advisors.

For the market to reach bigger all-time highs in the final half of the year, Tyner thinks the market will need more participation. He noted that events such as the election, the timing of the rate cuts and indications of softening consumer demand could weigh on the markets.

"If all those things play out, we may see more volatility," Tyner said. "All in all, everyone is enjoying the last 10 months of the market because it's been easy, [but] at some point, the complacency will have to end."

Nike shares slipped nearly 20% after the athletic retailer cut its full-year guidance. Foot Locker shares declined more than 2% in sympathy.

Stocks close lower Friday

U.S. stocks ended Friday's trading session in the red.

The S&P 500 inched down 0.4%, while the Nasdaq Composite dipped 0.7%.

The Dow Jones Industrial Average fell about 45 points, or 0.1%.

— Hakyung Kim

Energy leads weekly sector gains

Energy is up 2.5% week to date, making it the best-performing sector for the week.

Communication services also gained more than 2% and outperformed the broader market.

Utilities and materials both declined around 1.3%, pulling down the S&P 500.

— Hakyung Kim

Expect only moderate improvements to inflation heading into the second half of the year, HSBC says

Progress on inflation could stall heading into the second half of the year, according to HSBC.

"We still expect the pace of improvement in inflation from here to be only gradual and uneven given the ongoing stickiness in service sector inflation and the fact the 'easier' supply-driven improvements from energy prices and global supply chains that were so critical to collapsing goods price inflation have now run their course," analysts Janet Henry and James Pomeroy wrote in the firm's global outlook.

"There are some signs of discounting now in the US but inflation is set to rise in places in the coming months given not just base effects but the recent strength in an array of commodity prices, from metals to foods, and ongoing shipping disruptions and the impact on freight costs," the note continued.

— Brian Evans

Chip stocks among biggest first-half winners in the Nasdaq

Chips stocks triumphed again during the first half of 2024, contributing to a significant chunk of the Nasdaq-100's roughly 18% year-to-date gain.

Nvidia is the most significant gainer in the concentrated index, up 152%, while Arm Holdings has rallied 119%. Micron Technology has jumped 54%, while Applied Materials, KLA Corporation and Broadcom have gained at least 40% each.

Constellation Energy is the third-biggest winner in the index with a 73% year-to-date gain. CrowdStrike has surged 51%, while Meta Platforms is on pace for a 45% gain in the first half.

Walgreens Boots Alliance and Lululemon Athletica are the biggest losers in the index. The drugstore giant has lost more than half its value since the start of 2024, while Lululemon is down 41%.

— Samantha Subin

The Fed should ‘tee up’ a cut at next meeting, Jeremy Siegel says

The Federal Reserve should make plans for an interest rate cut during its next Federal Open Market Committee meeting in July, according to Wharton's Jeremy Siegel. 

"I really think the Fed should tee up a cut on the July 31 meeting, confirm it at Jackson Hole in August and do it in September," the finance professor told CNBC's "Squawk on the Street." He added that one or maybe one-and-a-half rate cuts have already been priced in.

"I actually think there will be more because there might be a little bit more softness of the economy and better inflation numbers, both of those feeding better rates," he continued.

Siegel also said it is "hard to say" where the bull market's trajectory currently stands. The S&P 500 and tech-heavy Nasdaq Composite are on pace to close at fresh records on Friday. The two indexes are up more than 15% and 19%, respectively, year to date.

"Tech, as I've been saying, has been delivering the bacon for all those investors, and that momentum is still there," he said. "I've been saying that for three or four months, so I don't see that breaking."

— Sean Conlon

Stocks making the biggest moves in midday trading: Trump Media, Kura Sushi and more

These are the stocks moving the most in midday trading:

• Trump Media & Technology — Shares of Trump Media & Technology Group declined about 2%, reversing an earlier gain on the heels of the first presidential debate between former president Donald Trump and President Joe Biden.
• Kura Sushi USA — The sushi company plunged 25% after posting disappointing preliminary revenue figures for the third quarter.
• Nike — The athletic apparel giant plummeted 19% after the firm posted fourth-quarter revenue of $12.61 billion, which came below the $12.84 billion forecast by analysts surveyed by LSEG. Nike also reduced its full-year outlook.

Read the full list of stocks moving here.

— Lisa Kailai Han

Small caps lag this year

Small-cap stocks have been underperforming the broader market this month, quarter and year.

The small cap-focused Russell 2000 has slipped 0.8% in June and more than 3% over the second quarter. For the whole year, the index is up less than 1.5%.

By comparison, the broad S&P 500 has climbed about 4.5% on the month and nearly 5% compared to the start of the quarter. For all of 2024, the S&P 500 has jumped more than 15%.

— Alex Harring

Wall Street strategists expect limited gains from here

The S&P 500 may have had an impressive start to the year, but Wall Street strategists are not anticipating it can gain much more from here.

A CNBC Pro survey shows that strategists anticipate the S&P 500 will end the year at 5,500 on a median basis, a level that is not even 1% above where the broader index closed Thursday at 5,482.87. In fact, the index was trading above the 5,500 level on Friday. The benchmark is already higher by more than 15% this year.

Some more bullish investors still anticipate a sizable advance in the second half. Evercore ISI's Julian Emanuel, for example, expects the S&P 500 could cap the year off at 6,000, roughly 9% above Thursday's close.

Others, however, worry stocks are due for a pullback, concerned about poor breadth and waning momentum, among other factors. JPMorgan's chief stock strategist Dubravko Lakos-Bujas, who has the lowest forecast in CNBC's survey, anticipates the S&P 500 will fall to 4,200, or a more than 20% plunge.

— Sarah Min

Nike sees biggest drop since 2001

Shares of Nike plunged 19% in morning trading after the retailer cut its full-year guidance for fiscal 2025. This is Nike's biggest drop since Feb. 27, 2001, when shares plummeted 19.46%, according to FactSet. The stock is also down more than 29% this year.

The company said after the bell Thursday that it now sees sales being down mid-single digits, while analysts were estimating a 0.9% increase.

— Sean Conlon

High-flying semiconductors, topped by Nvidia, again lead first-half stock market winners

First-half winners on the U.S. stock market were once again led by the world's largest makers of semiconductors.

Of the top five stocks in the VanEck Semiconductor ETF — itself up 52% in the first half — measured by the percentage of the ETF devoted to each, Nvidia soared 156% over the first six months of 2024, Taiwan Semiconductor jumped 70%, Broadcom climbed 46%, Qualcomm surged 40% and Texas Instruments added 16%.

Companies that make the equipment used by chip manufacturers also thrived in the first half. KLA Corp. advanced 44%, ASML increased 43% and Lam Research climbed 38%.

With the exception of TXN, all of them handily beat the S&P 500, which rose almost 16% in the first half. Thank you, ChatGPT, OpenAI, large language models and everything and anything even remotely related to artificial intelligence.

— Scott Schnipper

Inflation outlook improves in University of Michigan survey

Consumers grew more sanguine about inflation in the near term but still don't expect the Federal Reserve to achieve its 2% target in the next five years, according to the latest University of Michigan Survey of Consumers.

Respondents to the June survey expect inflation in a year to be 3%, down from 3.3% in May. However, the survey showed the five-year outlook stuck at 3% as well and unchanged from the previous two months.

The sentiment index came in at 68.2, down nearly a point from May but better than the Dow Jones estimate for 66. This was the third and final reading for the June survey.

— Jeff Cox

The Dow's poor second-quarter performance

The Dow is down 1.6%, or 643 points, entering the final trading session of the second quarter. It has far underperformed the S&P 500 (up 4.4%) and the Nasdaq Composite (up 9.0%) this quarter.

A major reason for the Dow's poor showing over the past three months: Salesforce's 16% decline has amounted to a more than 300-point drop in the index — almost half the Dow's total losses this quarter.

Another issue: Some first-quarter standouts failed to sustain the momentum. Disney, Caterpillar and Travelers are all down 10% or more this quarter after racking up gains of 20% or more in the first quarter.

At the other end of the spectrum, Apple is easily the Dow's best performer this quarter with a 25% gain. That too is a total reversal from the first quarter, when the tech giant was one of the index's biggest decliners with an 11% drop.

One stock that has not seen any reprieve is Intel. The chipmaker's 31% drop is the worst on the Dow this quarter. That compounds to its poor showing in the first quarter, when it fell 12%. It has fallen 39% so far this year — more than every other Dow stock.

 — Robert Hum

 

Boeing shares tumble 30% in first half

Boeing has had a rocky first half of 2024, with shares down 30% since the start of the year.

The aerospace giant has been under scrutiny since its latest incident in January, when a door panel blew out midair on its 737 Max 9 operated by Alaska Airlines. The National Transportation Safety Board has an investigation underway and on Thursday, it sanctioned Boeing for "blatantly" violating regulations by sharing information about the investigation.

The Justice Department also said in May that Boeing violated a 2021 settlement that protected it from criminal charges tied to two fatal crashes involving its 737 Max planes. Prosecutors said they are still determining how to proceed.

Meanwhile, Boeing CEO Dave Calhoun was blasted by a Senate panel earlier this month when he answered questions about the company's safety. Calhoun said in March he will step down at the end of the year.

The company's quarterly earnings report in April showed Boeing was burning cash to try to stabilize production.

— Michelle Fox

Lilly shares tally a 56% gain in first half of the year, Alzheimer's drug approval expected soon

Eli Lilly shares are ending the first half of 2024 up nearly 56%, building on last year's gains.

The excitement around anti-obesity medication has propelled the stock, and that is unlikely to change in the second half of the year. However, the next catalyst for the stock is likely to be the expected U.S. Food and Drug Administration approval of its Alzheimer's disease treatment donanemab.

Morgan Stanley analyst Terence Flynn expects shares to trade flat to slightly up on approval, or down about 1% to 3% if that does not occur. A panel of FDA advisors has already backed the drug. Flynn estimates the treatment will represent about 4% of Lilly's 2030 sales.

Morgan Stanley has an overweight rating on the stock and a $1,023 price target, which implies 12% upside from Thursday's close.

— Christina Cheddar Berk

S&P 500, Nasdaq open higher Friday

The S&P 500 and Nasdaq Composite began Friday's trading session in the green.

The broad market index and tech-heavy Nasdaq gained 0.1% each. Meanwhile, the Dow Jones Industrial Average was marginally lower.

— Hakyung Kim

U.S. oil trades near two-month high on Israel-Hezbollah war fears

U.S. crude oil on Friday traded near a two-month high as fears of war between Israel and the Iran-backed militia Hezbollah grow.

West Texas Intermediate hit an intraday high of $82.72 per barrel, the highest level for the U.S. benchmark since April 30.

Israel and Hezbollah have exchanged an escalating number of attacks across Lebanon's border in recent weeks, stoking fears that Israel will invade to push the militia back and trigger a direct confrontation with OPEC member Iran that could disrupt crude supplies.

The Pentagon has moved military assets closer to Lebanon to prepare for evacuating Americans, three U.S. defense officials told NBC News.

— Spencer Kimball

Multiple firms downgrade Nike after fourth-quarter results

Shares of Nike plunged 15% in early trading Friday morning after the firm posted fourth-quarter revenue of $12.61 billion, which came below the $12.84 billion forecast by analysts surveyed by LSEG.

Despite reporting an earnings beat, Nike also reduced its full-year guidance, further sending its stock lower.

In response, multiple Wall Street firms downgraded the stock on Friday, including Morgan Stanley, UBS, Stifel, JPMorgan and Raymond James.

"We downgrade our rating to Market Perform from Outperform as we view the F4Q revenue miss and FY25 guide down as indicative of the difficulty NKE is having in driving a turnaround in global demand," wrote Raymond James analyst Rick Patel.

Similarly, Morgan Stanley analyst Alex Straton cited an extended timeline for improvement, performance volatility and potential further negative earnings per share revision risks as reasons for her downgrade to equal weight from overweight.

— Lisa Kailai Han

Key inflation gauge matches estimates

The core personal consumption expenditures index rose 0.1% month over month. Year on year, it gained 2.6%. Those increases were in line with Dow Jones consensus estimates. The year-on-year increase is also a decrease from the 2.8% advance seen in April.

— Fred Imbert

Nike, Trump Media & Technology among Friday's biggest premarket movers

These are some of the stocks on the move before the bell:

• Nike — Nike shares sank more than 14% after the athletic retailer posted disappointing revenue for the recent quarter and cut its guidance, saying it expects sales to drop 10% in the current period. The company now estimates fiscal 2025 sales will fall in the mid-single digits.
• Trump Media & Technology — Shares of Trump Media & Technology jumped more than 10% on the heels of the first presidential debate between former President Donald Trump and President Joe Biden. Many viewed Biden's performance as disappointing.
• Infinera — Infinera shares popped 19%. Nokia announced plans to buy the networking solutions supplier for $2.3 billion.

Read the full list of names on the move here.

— Samantha Subin

What economists expect from key inflation report

The May reading of the core personal consumption expenditures index is slated for release Friday at 8:30 a.m. ET. Economists polled by Dow Jones expect a 0.1% month-over-month increase. Year on year, they see a 2.6% gain.

— Fred Imbert

European markets open higher

European stocks were slightly higher Friday as investors look ahead to key inflation data from the euro zone and U.S.

The pan-European Stoxx 600 was up 0.17% in early trade, as the majority of sectors and major bourses traded in the green. Mining stocks rose 0.82%, while household goods dipped 0.5%.

— Karen Gilchrist

Stress test results show U.S. banks are in a ‘good’ place, Mike Mayo says

U.S. banks are doing well following Wednesday's results of the Federal Reserve's stress test, according to Wells Fargo's Mike Mayo.

"The Fed threw the kitchen sink at the banks," the top bank analyst told CNBC's "Closing Bell." He added that the hypothetical scenario was "worse" than the 2008 global financial crisis. "U.S. banks are in a very good, resilient place," he continued.

Mayo also said the result of Citigroup, in particular, was "a surprise." Shares of the firm were marginally higher during Thursday's trading session and are up about 19.7% this year.

— Sean Conlon

Accolade, American Outdoor Brands diverge in extended trading

In addition to Nike, some lesser-known stocks were also moving after the bell on the back of financial releases.

Health technology stock Accolade fell more than 27%. Despite exceeding expectations of analysts polled by FactSet on adjusted EBITDA and revenue for the first fiscal quarter, the company issued softer-than-expected guidance for the current quarter.

The company said it should see a loss of between $8 million and $10 million in adjusted EBITDA during the quarter, wider than the FactSet consensus forecast of $5.9 million. Accolade also said to anticipate quarterly revenue in the range of $104 million to $106 million, under Wall Street's estimate of $113.2 million.

On the other hand, American Outdoor Brands climbed more than 8% on strong earnings in its fiscal fourth quarter. The outdoors-focused product maker saw $46.3 million in revenue, while analysts surveyed by FactSet penciled in revenue of just $43.1 million.

— Alex Harring

Most retail traders own financial stocks, survey says

Retail investors may not be quite as hungry for highly volatile stocks as their reputation implies, according to a survey from eToro.

The brokerage firm's second-quarter Retail Investor Beat report said 54% of retail investors reported holding financial services stocks, compared to only 49% holding technology stocks. That has been true in the three previous quarterly surveys as well.

The survey was done in May after a slight pullback for the market, and eToro U.S. investment analyst Bret Kenwell told CNBC that the dip appeared to affect confidence among younger investors.

"Older investors are letting their experience kind of work in their favor, whereas the younger investors aren't necessarily scared off … but they're less experienced in general, and because of it I think they get a little more rattled than the older, seasoned investor," Kenwell said.

— Jesse Pound

Nike shares sink on revenue worries

Despite a big earnings beat, Nike shares fell about 11% in extended trading after the company posted its third revenue miss in four quarters and cautionary guidance for its new fiscal year.

Accounting for the drop in after hours, Nike's stock is down nearly 23% year to date. Only Intel and Boeing have fared worse in the Dow this year.

The weaker consumer environment is weighing on sales, with North America and Asia/Latin America revenues missing Wall Street's expectations. Chief Financial Officer Matthew Friend remarked in the earnings release that "our fourth quarter results highlighted challenges that have led us to update our Fiscal '25 outlook."

— Robert Hum

Stock futures are near flat

Stock futures were little changed shortly after 6 p.m. ET.

Dow futures slipped 0.1%, while S&P 500 and Nasdaq 100 futures each inched higher.

— Alex Harring