Most of the major benchmarks endured a fifth consecutive week of losses as interest rate and inflation worries continued to weigh on sentiment, especially toward growth stocks. The losses briefly pushed the Dow Jones Industrial Average into correction territory, down more than 10% from its recent highs, where it joined the S&P 500. The Nasdaq Composite ended the week firmly in bear markets, down more than 25%.
Big Tech earnings:
Meta: With the market locking its eyes on user growth (following last week's Netflix disaster), numbers from Facebook parent Meta Platforms (FB) appeared impressive despite the slowest revenue expansion since the company went public. Daily active users rose 4% to 1.96B, topping expectations there, while monthly active users rose 3% to a generally in-line 2.94B. Shares of the social network soared more than 16% in AH trading on Wednesday.
The Dow Jones average suffered its worst beating since October 2020 on Friday, capping a fourth straight weekly decline, as mostly positive earnings reports failed to ease worries about rising inflation. Major indexes dropped after speech by Fed Chairman Jerome Powell on Thursday that signaled support for 0.5% rate hike is very much on the table since taming inflation is "absolutely essential." Rates jumped on Powell's remarks before the benchmark 10-year yield eased slightly on Friday to about 2.9%.
The three major stock market indexes posted losses for the week, with the S&P 500 snapping a three-week winning streak that had lifted it to its best performance since 2020, as investors reacted to the Federal Reserve's more aggressive tone in fighting inflation. Throughout the week, investors parsed comments from Fed officials as well as the latest minutes that showed policymakers were considering raising rates and unwinding its balance sheet faster, which drove stocks lower. The Dow Jones Industrial Average fell 0.3% on the week, while the S&P 500 index dropped 1.3%.
The stock market showed slight gains on Friday while the U.S. yield curve extended its recent flattening, after another strong employment report signaled that the Federal Reserve is likely to raise rates at least six more times this year. Investors appeared to largely shake off a recession signal from the bond market that was triggered when the two-year and 10-year Treasury yields inverted for the first time since 2019. Crude oil posted its biggest weekly loss in more than 10 years after the Biden administration ordered an unprecedented release of U.S.
All three major stock market indexes rose second straight week, with energy topping Friday's sector leaderboard as crude oil advanced to nearly $120 per barrel following drone attacks on a Saudi Arabian fuel depot. The sector helped the S&P 500 to a 0.5% gain on Friday and a 1.8% rise for the week, while the tech-heavy Nasdaq fell slightly on Friday but led the major indexes for the week with a 2% rally and the Dow Jones ticked up 0.3%.
Previous week was the best once since November 2020 for stocks, as buy-the-dip investors piled into stocks after the market started the week from an oversold position. This week's big move came even after the Federal Reserve raised its benchmark rate for the first time since 2018, as the Fed move was widely expected, which helped embolden bullish sentiment. Investors also weighed a denial that China is considering support for Russia and mixed signals from peace talks between Russia and Ukraine.
Stocks fell on Friday as risk sentiment worsened after Ukraine’s top diplomat said he didn’t see progress in negotiations between Russia and Ukraine, after Vladimir Putin reportedly had cited "certain positive developments" in the talks. The U.S. added vodka, caviar and diamonds to the list of banned Russian imports, and President Biden said he would seek to revoke the country’s preferential trade status, which would lead to higher tariffs on Russian goods. Inflation fears are intensifying, The U.S. consumer-price index popped 7.9% year-over-year in February, and with U.S.
Stocks continued falling this week as well, as investors worried that risks surrounding Russia's war on Ukraine may be spinning out of control, and oil prices skyrocketed after the White House said it was considering a ban on imports of Russian crude. Commodities of all kinds continued to push higher on fears of supply crunches, with crude oil soaring past $130 per barrel to trade near its highest since 2008. Gold price also rose and reached $2,000 at some point.
