BOJ hikes too, as Wall Street ends a choppy week quietly

Good morning. Wall Street closed a bumpy week with a quiet session. The Dow fell for a third straight week, and only the Nasdaq managed a small weekly gain. The Fed's first hike in three years rattled things, but oil slid for three days and the 10-year yield dropped back under 5%, letting AI stocks revive the mood late in the week.

The phrase of the week came from Chair Warsh, who said the Fed had removed a dose of accommodation. That set off a guessing game over how many more hikes are coming. The FOMC statement ran just 130 words, the shortest since 2007, and that restraint was read as a signal in itself. The 2-year yield climbed to about 4.74%, the highest since July 2024.

Oil caught its breath. Saudi Arabia plans to reroute roughly 60 million barrels via Oman to get around the blocked pipeline, and WTI slid to around $95. Diesel is still at a record, though, which hurts US farmers in harvest season and raises the risk of higher food prices.

The Bank of Japan also raised rates, by a quarter point to 1.25%, the highest since 1995. Even so, the yen weakened and the Nikkei rose, since two board members dissented and Governor Ueda gave murky signals.