4:07pm: Virgin Galactic among the day's laggards
The Dow closed Friday down 218 points, 0.6%, at 33,729, the Nasdaq Composite declined 138 points, 1%, to 13,493 and the S&P 500 slid 33 points, 0.8%, to 4,348. The small-cap Russell 2000 index lost 28 points, 1.5%, to 1,820.
The major benchmarks each snapped multi-week winning streaks, with the Nasdaq breaking an eight-week upward trend. The tech-laden exchange posted its worst weekly result since April.
Shares of Virgin Galactic plummeted 18% after the company announced plans to sell shares worth up to $400 million on top of $300 million sold since March 2023 as it prepares for commercial operations to take off.
Meanwhile, Bitcoin enjoyed an upswing in value, climbing 2.2% to $30,896.92 Friday afternoon.
12:05pm: US benchmarks on track for a losing week
US stocks were lower in noon trading as investors continued to fear more Federal Reserve interest rate increases this year.
At midday, the Dow lost 157 points to 33,790, while the S&P 500 eased 27 points at 4,355 and the tech-heavy Nasdaq slipped 130 points to 13,501.
“Investors are definitely exhibiting the renewed fears of a US recession, as well as a global recession,” AXS Investments CEO Greg Bassuk said.
Notable movers included shares of CarMax, Inc, which jumped 10% after the used car retailer posted better-than-expected 1Q results.
9:40am: Stocks slide at the open
US stocks are on track for a losing week as Federal Reserve chair Jerome Powell’s hawkish outlook and interest rate hikes from several central banks weighed on sentiment on Friday.
Just after the opening bell, the Nasdaq was down 131 points or 1% at 13,499 points, the Dow Jones had shed 270 points or 0.8% at 33,677 points, and the S&P 500 had lost 36 points or 0.8% at 4,346 points.
“[Powell’s] comments that the Fed would proceed with caution resulted in a small relief rally, but stocks are still set to book weekly losses after several weeks of gains,” noted FOREX.com market analyst Fiona Cincotta.
“While Fed Chair Powell pointed to another two rate hikes this year, the market is less convinced, pricing in another 25-basis point hike in July. Recent data has also raised concerns about a potential recession which is also hurting risk sentiment.”
7:50am: Soggy end to the week
US stocks are expected to open lower on Friday as the focus shifts from inflation to growth in a week that has seen central banks double down on their efforts to contain price increases, with the Bank of England and the Swiss National Bank raising rates and Federal Reserve chair Jerome Powell telling two days of Congressional hearings that more rates hikes may be necessary in the US.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.3% in pre-market trading, while those for the broader S&P 500 index declined 0.4% and contracts for the Nasdaq-100 were 0.5% lower.
Tech shares recovered on Thursday after three days of losses, propelling the Nasdaq Composite 1% higher to 13,631. The S&P 500 added 0.4% to 4,382 but the DJIA closed 5 points lower at 33,947.
“It’s tech to the rescue once again as a strong showing from names such as Amazon and Apple helped Wall Street to record a positive session last night,” commented Danni Hewson, head of financial analysis at AJ Bell.
“Federal Reserve chairman Jerome Powell gave the market the message it wanted to hear – while US rates have not hit the top of the current cycle, the central bank will proceed with caution. That was enough to convince investors to keep bidding up shares in the mega-cap tech names, which in turn gave a near-1% lift to the Nasdaq last night.”
Aside from Powell’s comments, US Treasury Secretary and former Fed chair Janet Yellen noted that she felt US recession risks had fallen recently, said TickMill Group’s James Harte.
“Pointing to cooling inflation and a strong labour market, Yellen cited her view that while a recession was still a possibility, given the Fed’s tightening campaign, such a scenario was no longer the expected base case,” Harte said.
“Looking ahead today, the latest round of US factory and non-factory sector PMIs will give a fresh insight into the health of the US economy," Harte added.
"While any upside might be welcomed in terms of endorsing Yellen’s view that a recession will be avoided, that same strength might also feed into expectations of further rate hikes, keeping stocks pressured near-term.”
Contact the author at stephen.gunnion@proactiveinvestors.com