As investors approached the end of a turbulent week, Wall Street declined on Friday, undoing an early recovery from Thursday’s sharp sell-off. Benchmark Treasury yields also declined from 16-year highs.
Tesla Inc. and Microsoft Corp. are the two companies that are weighing the most heavily on the Dow and the S&P 500. The Nasdaq remained mostly unaltered.
The S&P 500 and the Nasdaq are on course to experience their biggest Friday-to-Friday percentage declines since March, and all three indexes are expected to post weekly losses.
The S&P 500 fell below its 100-day moving average on Thursday for the first time since March. The fact that it was unable to break above that level shows that the index is still under pressure to decline.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut, stated that investors are testing the market to determine how much money has been lost and whether it is appropriate to enter again.
Benchmark U.S. Treasury rates dropped from 16-year highs as investors focused on impending important economic data rather than hawkish Fed comments.
The Fed’s decision to maintain its benchmark interest rate was still being processed by investors, but the Fed updated its quarterly Summary Economic Projections to indicate that the Fed’s tight monetary policy will last longer than originally anticipated.
Fed Governor Michelle Bowman’s comments, which advocated raising the Fed funds target rate higher and keeping it “at a restrictive level for some time” to drive inflation down to the central bank’s 2% target, backed up the FOMC hawks.
The Fed needs to be reminded that there are many variables working against a smooth landing since raising interest rates could create a recession, according to Pavlik.
At 2:21 PM ET, the Nasdaq Composite rose 2.46 points, or 0.02%, to 13,226.45, the S&P 500 dropped 4.22 points, or 0.10%, to 4,325.78, and the Dow Jones Industrial Average dropped 64.04 points, or 0.19%, to 34,006.38.
Consumer discretionary was the S&P 500’s 11th largest sector with the biggest decline. The highest percentage gains were seen in tech shares.
Following news of progress in negotiations with the carmaker from the striking United Auto Workers union, Ford Motor Company saw a 2.3% increase.
Following the announcement by Britain’s antitrust regulator that Microsoft Corp.’s restructuring $69 billion acquisition of the company “opens the door” to the biggest gaming deal ever being approved, Activision Blizzard saw a 1.7% increase.
PDD Holdings, JD.com, Li Auto, and Baidu are some Chinese companies with U.S.-listed stock that increased between 2% and 4% in response to signs of economic recovery. Alibaba increased by 4.7% after Bloomberg reported that the company’s logistics arm Cainiao was preparing to submit a Hong Kong IPO application as early as next week.
On the NYSE, advancing issues outpaced advancing issues by a ratio of 1.24 to 1; on the Nasdaq, a ratio of 1.09 to 1 favoured decliners.