The S&P 500 and Nasdaq have suffered their worst weekly losses since March
For much of the session, all three major US stock indices oscillated but ended in the red.
Wall Street closed down on Friday, concluding a volatile week in which benchmark Treasury rates reached 16-year highs as investors digested the Federal Reserve’s hawkish outlook revisions.
The three major US stock indices oscillated throughout the session but finished in the red.
The S&P 500 and Nasdaq both reported weekly losses, with the S&;P 500 and Nasdaq posting their greatest Friday-to-Friday percentage decreases since March.
The S&P 500 and Nasdaq both reported weekly losses, with the S&P 500 and Nasdaq posting their greatest Friday-to-Friday percentage decreases since March.
The S&P 500 fell below its 100-day moving average, a critical support level, for the first time since March. The index’s failure to break above that level means the index is still under pressure.
“This week is about some Fed messaging colliding with overly optimistic equity investors,” explained Zachary Hill, portfolio manager at Horizon Investments in Charlotte, North Carolina.
Investors, according to Hill, have “wanted to trade peak interest rates for almost a year now.” But, he said, it was evident in Fed Chair Jerome Powell’s speech this week “and in the dot plot that the Fed doesn’t think we’re there yet.”
“This week’s stock market action has been about digesting that reality.”
Benchmark U.S. Treasury rates fell from 16-year highs as investors shifted their focus away from aggressive Fed direction and toward critical economic data.
Investors were still processing the Fed’s decision to leave its benchmark interest rate unchanged, but to revise its quarterly Summary Economic Projections, implying that the Fed’s restrictive monetary policy would remain in place for a longer period of time than previously anticipated.
Fed Governor Michelle Bowman supported FOMC hawks on Friday, urging that the Fed funds target rate be raised further and held “at a restrictive level for some time” to bring inflation down to the central bank’s 2% target.
“There are a lot of factors working against a soft landing, and that’s something the Fed needs to be reminded of, because pushing rates higher could push us into recession,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.
The Dow Jones Industrial Average (.DJI) was down 106.58 points, or 0.31%, to 33,963.84, the S&P 500 (.SPX) was down 9.94 points, or 0.23%, to 4,320.06, and the Nasdaq Composite (.IXIC) was down 12.18 points, or 0.09%, to 13,211.81.
Consumer discretionary (.SPLRCD) suffered the biggest percentage loss among the S&P 500’s 11 major sectors, while technology (.SPLRCT) and energy (.SPNY) were the only gainers.
Ford Motor Company (F.N) rose 1.9% after the United Auto Workers union, which is on strike, claimed progress in discussions with the firm.
Activision Blizzard (ATVI.O) gained 1.7% on a statement by Britain’s antitrust authority that Microsoft Corp’s (MSFT.O) restructured $69 billion acquisition of the business by “opens the door” to the largest-ever gaming deal being cleared.
PDD Holdings (PDD.O), JD.com, Li Auto, and Baidu rose between 2% and 4% on signs of an economic recovery, while Alibaba rose 5.0% after Bloomberg reported that the company’s logistics arm Cainiao was planning to file for a Hong Kong IPO as soon as next week.
On the NYSE, decliners outweighed advancers by a 1.12-to-1 ratio; on the Nasdaq, decliners outpaced advancers by a 1.29-to-1 ratio.
The S&P 500 set a new 52-week high and 35 new lows, while the Nasdaq Composite set 33 new highs and 321 new lows.
Volume on US markets was 9.47 billion shares, compared to the 10.09 billion average for the entire session for the previous 20 trading days.