Stock Market Pulls Back As Debt Talks Stall; Warren Buffett's Berkshire Tops Buy Point

Stock market losses were modest Friday afternoon, despite the morning gains. Investors listened to Jerome Powell, the Fed chair's remarks on monetary policies and the federal debt limit meeting.

After House Speaker Kevin McCarthy stated that the latest discussions did not yield any progress, indexes fell from their session highs. The talks on Friday ended without a date for the next meeting.

Powell stated that the stress on the banking system may mean "our policy rate does not have to be as high as we would otherwise need to achieve our goals."

He said that inflation was still too high, and that the Fed would remain "steadfast" with its goal of reducing prices.

The yield on the 10-year U.S. Treasury increased by 2 basis points, to 3.67%. CME FedWatch shows that over 80% of the odds are against a rate hike during the June Fed meeting, while the rest expect a quarter point hike. Powell's remarks changed the expectations from earlier in the day, when they were closer to 60%.

The Dow Jones Industrial Average, Nasdaq and S&P 500 all fell by 0.3%. S&P 500 fell 0.1%. Russell 2000 was even worse, losing 0.7%.

NYSE volume increased and Nasdaq fell compared to the same time Thursday.

The Nasdaq-tracking Invesco Trust QQQ ETF (QQQ), which tracks the Nasdaq100, fell by 0.2%. This shows that Big Tech is still a resilient sector. The Innovator IBD50 ETF (FFTY), which tracks the Nasdaq 100, lagged behind with a drop of 0.8%.

Crude oil dropped 0.9% to $71.33 a barrel. Gold futures are still trading below the psychological $2,000 mark, despite a 1.1% rise. Bitcoin rose 0.7% to $26,965.

The European stock market was higher with the DAX in Germany adding 0.7%, and the CAC in Paris rising 0.6%. London's FTSE closed the week with a 0.2% decline.

Stock Market: Buffett can't get enough OXY

According to a May SEC filing, Warren Buffett's Berkshire Hathaway added more than 3.4 million shares in Occidental Petroleum. Berkshire now owns nearly 25% of Occidental. OXY's shares jumped 1.6% after the news.

Berkshire Hathaway's stock rose above the 331.94 purchase point of an elongated cup with handle base. The entry was reached, but shares fell below it.

Applied Materials' (AMAT) shares fell by 2.6% following the company's better-than expected earnings and sales for the April-ended quarter. The company provided subdued guidance on Thursday.

The shares hit the buy point of the cup base at 125.72 on Wednesday. They then surged another 3.4% Thursday in heavy volume, confirming the breakout. AMAT is at the lower end of the buy zone which can reach 132.01 according to IBD MarketSmith.

Footwear stocks are also a major stock market mover.

Foot Locker (FL), which reported lower-than-expected sales and profit on Friday morning, has seen its stock fall by over 26%. Comparable-stores sales dropped 9.1% while inventories increased by 25%.

The management said that sales had slowed significantly. This led to a reduction of the full-year forecast and price cuts in order to clear inventory. In a high volume of sales, the footwear retailer's 50-day moving median and 200-day line fell below their respective lines. This is a signal to sell.

Nike (NKE), Crocs (CROX), and On Holdings (ONON) all fell by similar amounts.

Deckers Outdoor (DECK), which is also a brand of Deckers, fell by 4.4% on heavy volume. This sent shares below the 50 day line and triggered a sell-off signal. Deckers brands include Hoka Teva, and Ugg.

Dicks's Sporting Goods, (DKS), also suffered a loss of over 6% on a heavy volume.