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Dow Jones ends lower in mixed finish for US stocks, S&P 500 suffers worst week since March 2020

U.S. stocks ended a lackluster Friday, with the Dow Jones Industrial Average erasing late-trading gains as investors continued to weigh concerns about slowing economic growth and a more aggressive Federal Reserve.

All three major stock indices posted a third straight week of losses, with the S&P 500 posting its worst weekly percentage decline since March 2020, according to data from the Dow Jones Market.

How have stock market indices evolved?
  • The Dow Jones Industrial Average DJIA,
    -0.13%
    fell 38.29 points, or 0.1%, to close at 29,888.78.

  • The S&P 500 SPX,
    +0.22%
    rose 8.07 points, or 0.2%, to end at 3,674.84.

  • The Nasdaq COMP composite index,
    +1.43%
    climbed 152.25 points, or 1.4%, to end at 10,798.35.

On Thursday, the Dow Jones fell 2.4% to end at 29,927.07, the lowest since December 2020, for both that index and the S&P 500, which closed down 3.3% at 3 666.77. The Nasdaq Composite fell 4.1% to 10,646.10, its lowest level since September 2020, according to Dow Jones Market Data.

For the week, the S&P 500 fell 5.8%, while the Dow Jones and Nasdaq each fell 4.8%. All three indices fell for a third straight week, with the Dow Jones posting its biggest weekly percentage decline since October 2020 and the S&P 500 booking its worst week since March 2020, according to Dow Jones Market Data.

What stimulated the markets?

U.S. stocks opened higher early on Friday before falling, then rebounding in volatile trading that has been attributed to the ‘quadruple witch’ – the simultaneous expirations of stock index futures, stock index options, stock options and single stock futures – which happens once a quarter, according to Joe Saluzzi, co-head of stock trading at Themis Trading.

“It was a bad week, it was a really bad week,” Saluzzi said. “The Federal Reserve definitely didn’t trust us this week…we’re kind of stuck right now.”

Saluzzi told MarketWatch on Friday that the combination of these two factors is weighing on stocks. He speculated that there may be more losses to come with the Cboe VIX Volatility Index,
-5.52%
high above 30, but still below a 40 reading which for some could indicate true investor capitulation.

Investors are still trying to rein in Wednesday’s interest rate hike by the Federal Reserve, the largest since 1994.

“The inflation dragon needs to be slain and the Federal Reserve is sending signals that it’s on it,” Scott Knapp, chief market strategist at CUNA Mutual Group, said in a phone interview Friday. The Fed’s sharp rate hike this week of three-quarters of a percentage point is “the stage setting for a significant slowdown in the economy and markets are adjusting accordingly.”

Markets had a week of murderous losses, with the S&P 500 dropping 5.8% for its biggest weekly loss since March 2020, according to Dow Jones Market Data.

SeeWhat the Biggest Fed Rate Hike in Decades Means for the Bond Bear Market

A mixed bag of data this week raised concerns about a slowing U.S. economy, Saxo Bank strategists said in a note on Friday. Stock traders can’t decide whether to ‘celebrate weak data as something that will eventually drive US yields lower and see the Fed’s tightening pace eventually reverse or worry about weak data because of the implications for corporate earnings,” they added.

On Friday, investors received May’s reading on U.S. industrial production, which came in below expectations but remained in positive territory, pointing to a fifth month of growth. Industrial production has been “weak,” said Knapp of CUNA Mutual Group, adding that the economy is “slowing down very quickly.”

Lily: US economy is slowing and likely to slow further, leading indicators show

Saxo said the next data points to watch will be the preliminary services and manufacturing PMI surveys for June, due next week. US markets will be closed on Monday for the June 16 public holiday.

On Friday morning, investors heard from Chairman Jerome Powell, who delivered a keynote address at the inaugural conference on the International Roles of the U.S. Dollar. Powell said the Fed is “extremely focused on getting inflation back to our 2% target,” but since his remarks focused primarily on the dollar’s role as the world’s reserve currency, his comments didn’t catch on. offered new information on the outlook for monetary policy. .

Minneapolis Federal Reserve Chairman Neel Kashkari said in a blog post on Friday that he could support another 75 basis point rate hike in July. He wrote that a “cautious strategy” after the July meeting could be to continue rate hikes of 50 basis points until inflation is “on track to decline” to 2%.

Lily: Recession risks are rising, but the U.S. economy is not set for a slowdown

Which companies were targeted?
  • Adobe Inc.
    ADBE,
    -1.18%
    shares fell 1.2% after a change in earnings forecast.

  • Shares of Mereo BioPharma Group
    MREO,
    +62.50%
    jumped 62.5% to $1.30 after The Times reported, without attribution, that AstraZeneca PLC
    AZN,
    +0.38%

    AZN,
    +1.68%
    is considering a bid for the London-based, US-listed biotech.

  • Diamondback Energy
    CROC,
    -8.52%
    and Devon Energy
    NDV,
    -8.30%
    were among the oil and gas companies that fell as crude prices fell, with Diamondback ending down 8.5% and Devon down 8.3%.

  • U.S.-listed shares of China-based companies posted gains on Friday after Reuters reported that China’s central bank had accepted Ant Group’s request to set up a financial holding company. Ali Baba Holding Group Ltd.
    BABA,
    +0.78%
    shares rose 0.8%.

  • Revlon REV shares,
    +91.28%
    jumped 91.3% following reports that Indian conglomerate Reliance Industries was considering buying the struggling cosmetics company.

How have other assets performed?
  • The yield on the 10-year Treasury note BX:TMUBMUSD10Y fell 6.5 basis points to 3.238%, according to Dow Jones Market Data. Yields and debt prices move in opposite directions.

  • The ICE US Dollar Index DXY,
    +0.98%,
    a measure of the currency against a basket of six major rivals, rose 1%.

  • BitcoinBTCUSD,
    -11.47%
    was trading down 0.6% at $20,551.

  • CL.1 Oil Futures Contracts,
    +0.84%
    fell, with West Texas Intermediate crude for July delivery sitting down 6.8% at $109.56 a barrel. U.S. oil prices have posted a weekly loss of more than 9%, posting seven straight weeks of gains, according to FactSet data.

  • Gold GC00,
    +0.05%
    for August GCQ22 delivery,
    +0.05%
    slid 0.5% to settle at $1,840.60 an ounce.

  • In European equities, the Stoxx Europe 600 SXXP,
    +0.09%
    closed up 0.1% on Friday, but posted a weekly loss of 4.6%. London’s FTSE 100 index ended down 0.4% on Friday, down 4.1% for the week.

  • In Asia, the Shanghai Composite SHCOMP,
    +0.96%
    ended Friday up 1%, booking a weekly gain of 1%. The Hang Seng HSI index,
    +1.10%
    rose 1.1% on Friday, cutting its losses for the week to around 3.4%. Nikkei 225 NIK from Japan,
    -1.77%
    closed down 1.8% on Friday, taking its weekly loss to 6.7%.

–Barbara Kollmeyer contributed to this report.

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Post expires at 6:55pm on Tuesday June 28th, 2022