Wall Street Ends Lower Amid Fed Chair Uncertainty and Global Geopolitical Tensions

U.S. stocks closed in the red on Friday as comments from President Trump on the next Fed chair stirred uncertainty, while global tensions and rising bond yields weighed on sentiment despite gains in real estate and semiconductor stocks.

The Dow dipped 83.11 points (0.2%) to 49,359.33, the Nasdaq slipped 14.63 points (0.1%) to 23,515.39 and the S&P 500 edged down 4.46 points (0.1%) to 6,940.01.

U.S. stocks ended lower on Friday, with the tech-heavy Nasdaq slipping 0.7%, while the S&P 500 and Dow declined 0.4% and 0.3%. The choppy trading followed President Donald Trump?s comments suggesting that National Economic Council Director Kevin Hassett may not be his choice to succeed Jerome Powell as the next Federal Reserve chair. Prediction markets now show former Fed Governor Kevin Warsh emerging as the frontrunner after Trump?s remarks.

Uncertainty over the Fed leadership and global geopolitical tensions kept investors cautious. Trump?s renewed threats to take control of Greenland and potential tariffs on non-supporting nations added to market jitters, while unrest in Iran, Venezuela, and the ongoing Russia-Ukraine conflict further weighed on sentiment. Meanwhile, the Federal Reserve reported that U.S. industrial production rose 0.4% in December, doubling economists? expectations and matching November?s revised gain.

Commercial real estate stocks as reflected by the 1.2% gain posted by the Dow Jones U.S. Real Estate Index. Semiconductor stocks also extended the rally seen during Thursday's session, driving the Philadelphia Semiconductor Index up by 1.2% to a record closing high. Steel stocks showed a notable move to the downside, with the NYSE Arca Steel Index falling by 1.2% after ending Thursday's trading at its best closing level in over seventeen years.

Asia-Pacific region turned in another mixed performance on Friday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both dipped by 0.3%, while South Korea's Kospi advanced by 0.9%. Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slid by 0.7%, the German DAX Index slipped by 0.2% and the U.K.'s FTSE 100 Index edged down by 0.1%.

In the bond market, treasuries have moved sharply lower over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, surged 7.1 bps to a four-month closing high of 4.23%.

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