Stocks fell Friday, pressured by a spike in oil prices and rising inflation expectations, as Wall Street wraps up a volatile week.
The S&P 500 declined by 0.50%, ending at 4,327.78. The tech-heavy Nasdaq Composite lost 1.23%, landing at 13,407.23. The Dow Jones Industrial Average was the outlier, rising by 0.12%, or 39.15 points, to close at 33,670.29.
On a weekly basis, the S&P 500 and Dow notched gains. The S&P 500 climbed 0.45% to mark its second positive week, while the Dow advanced 0.79%. The Nasdaq was down 0.18%.
Stocks came off their session highs after consumer sentiment data was released earlier Friday. According to the University of Michigan's closely watched survey, preliminary consumer sentiment data slumped in October while inflation expectations spiked.
The S&P 500 hit its low of Friday's trading session as oil prices spiked on fears that the Israel-Hamas war could escalate geopolitical tensions in the Middle East. U.S. West Texas Intermediate crude futures and international benchmark Brent crude futures each settled more than 5% higher, posting their best day since April 3.
Gold futures, which settled higher by 3.11%, had their best day of the year, dating back to Dec. 1, 2022.
Investors also kept an eye on Treasury yields. The yield on the 10-year Treasury was down by roughly 9 basis points at 4.62%. The 2-year Treasury yield was about 1 basis point lower at 5.05%. Yields and prices have an inverted relationship.
"Rates are still in the driver's seat, and that's really the rebound that we're seeing since last Friday," said Adam Turnquist, chief technical strategist at LPL Financial. "There's early signs that we're seeing technically here of a capitulation, but ... we're still fighting against an uptrend in longer-duration yields."
Unless the yield on the 10-year Treasury retreats to near 4.35%, Turnquist said he sees a "challenging and maybe choppy market as we look ahead for October."
Investors remain slightly cautious about equities, but are optimistic that stocks could rally in the fourth quarter if yields climb back down and rates move lower.
"Bonds are now offering strong competition for stocks given where yields are. So our current view is neutral on on equities," said Jeff Buchbinder, LPL's chief equity strategist. "If yields stabilize, as we expect, we think that's still a pretty good environment for stocks." The risk that rates will increase sharply hinge on a reacceleration of inflation, he said, which his firm views as unlikely.
A slew of largely positive reports from major financial firms on Friday had kicked off the third-quarter earnings season. Shares of JPMorgan Chase added 1.5% and Wells Fargo rose just above 3%, while Citigroup ended the day 0.2% lower. BlackRock's shares fell 1.3%.
UnitedHealth Group, which has the highest price per share of any Dow stock, gained 2.6% on earnings.
December gold futures contracts closed 3.11% higher Friday, turning in the strongest one-day advance since Dec. 2022, and rising above their 50- and 200-day moving averages for the first since Sept. 20. Gold's weekly 5.22% gain was the most since mid-March, and left the precious metal 6.31% higher on the year.
The VanEck Gold Miners ETF jumped 4.36% Friday, while the VanEck Junior Gold Miners ETF climbed 5.12%.
In energy markets, West Texas Intermediate and Brent crude oil both turned in their best days since April 3, with November WTI futures surging 5.77% to $87.69 a barrel and December Brent climbing 5.69% to $90.89/bbl. The national average for a gallon of gasoline dropped to $3.628, down 12 cents from a week ago and 22 cents from a month ago, the American Automobile Association said.
Among soft commodities, orange juice closed at a record, with November futures rising 0.17% to $3.859 per pound, posting a sixth straight week of gains. Orange juice is higher by 90.25% in 2023.
— Scott Schnipper, Gina Francolla
Here's how the major indexes ended Friday's trading session:
— Pia Singh
An accelerated Nvidia product pipeline is reaffirming Bank of America's confidence in the chipmaker.
The "new data center roadmap disclosure suggests widening product breadth with an accelerated launch cadence that can continue to make it tougher for merchant competitors (AMD, INTC) to catch-up or internal cloud silicon efforts to prove themselves in the era of rapidly rising silicon cost/complexity," said Vivek Arya in a Thursday note to clients, reiterating the company as a top pick.
The firm's $650 price target implies 38% upside for shares from Thursday's close. The stock's more than tripled since the start of 2023 on AI-related enthusiasm.
Looking ahead, Arya views estimates as potentially underestimating the scale and optimization needed for generative AI and Nvidia's opportunity within the inferencing market.
"We believe there could be upside to projected ~$42bn/$70bn/$88bn in NVDA's CY23/24/25E data center sales (consensus), as it implies only ~35% share of a potential $250bn (and growing) addressable annual opportunity in cloud/enterprise data center infrastructure capex," he wrote.
— Samantha Subin
Post Holdings is "a post-er child for strong free cash flow," according to JPMorgan. Analyst Ken Goldman initiated coverage on the company with an overweight rating.
The packaged food company includes a variety of categories and brands, many of which are under private labels.
"Post generates strong cash flow, which may be applied in large quantities to reduce debt and buy back stock over the next two years," Goldman said in a Friday note.
More about his upgrade can be found here.
— Hakyung Kim
Regional banks will be in focus in the week ahead as traders head into the thick of third-quarter earnings season.
"I want really some indication as to whether the regional banking crisis of last March has really ended," Komal Sri-Kumar, president at Sri-Kumar Global Strategies. "I don't think so."
CNBC Pro subscribers can read the full story here.
— Sarah Min
Recent data for cancer treatment manufacturer MorphoSys AG suggests the German biotech's shares could see a significant rally, according to Morgan Stanley.
The bank double upgraded MorphoSys American depositary shares to overweight from underweight on Friday.
MorphoSys is awaiting topline results from the Phase 3 MANIFEST-2 trial, a global, multi-center study examining the effects of pelabresib in patients with myelofibrosis, a rare type of bone marrow cancer.
Shares are up more than 2% as of Friday morning.
More about the call can be found here.
— Hakyung Kim
Oil prices climbed nearly 6% on Friday as investors remained on edge about escalating geopolitical tensions in the Middle East.
U.S. West Texas Intermediate crude futures jumped 5.8% to settle at $87.7 per barrel for the best day since April 3. International benchmark Brent crude futures with December expiry climbed $4.89, or 5.7%, to $90.89 per barrel.
WTI crude gained more than 4% this week, posting its biggest weekly gain since Sept. 1.
— Yun Li
Shares of the biopharmaceutical stock Immunovant were up more than 7% on Friday after UBS upgraded it to buy from neutral.
UBS highlighted IMVT-1402 – the company's antibody for the treatment of certain autoimmune diseases – as "game-changing" and "potentially best-in-class," and said there's significant upside in the stock.
The bank also nearly tripled its price target on the shares, raising it to $55 from $18.
— Tanaya Macheel
KKR, Dell Technologies, Apollo Global, Lululemon Athletica, Cheniere Energy and Trade Desk are the largest companies by market value that are likely to replace Activision Blizzard in the S&P 500 in an announcement that could come as soon as 5:15 p.m. ET Friday, according to a report from Keefe, Bruyette & Woods.
Microsoft closed its $69 billion of Activision premarket Friday following final approval of the deal by U.K. regulators.
Financial stocks are the most underweighted group in the S&P 500 relative to their share of the Total Market Index, but tech, communication services and energy are also underrepresented, KBW said. A communications stock such as Trade Desk or Warner Music Group "may be ATVI's most likely replacement given the sector is set to become even more underweight" as a result of the MSFT-ATVI deal.
KBW cautioned, however, that while KKR is the largest candidate by market capitalization, it's also the least traded with the lowest liquidity of all the top candidates.
— Scott Schnipper, Michael Bloom
The U.S. Securities and Exchange Commission on Friday finalized new rules that require short sellers to report their positions to the SEC and the Financial Industry Regulatory Authority (FINRA).
By requiring hedge funds and other big investors to report their short holdings on a more regular basis, the SEC is aiming to increase transparency on the controversial trading strategy. The practice came under intense scrutiny after investors heavily shorted Gamestop shares in January 2021.
— Hakyung Kim
Friday the 13th may actually be a lucky day for markets, according to Bespoke Investment.
The firm found that from 1953 to 2023, the S&P 500 has posted a daily change of about 14.5 basis points. By comparison, the S&P 500 changes an average of 6.1 basis points on a typical Friday.
Out of the Friday the 13ths over the 50-year period, the daily change has been positive 58% of the time, versus a 55.9% positive change rate on a regular Friday.
— Hakyung Kim
The tech-heavy Nasdaq Composite is on track for a modest lost week, but some stocks are on track to cap off the week with strong gains.
Diamondback Energy and Walgreens Boost Alliance are the biggest winners in the concentrated Nasdaq-100 for the week, with shares up more than 10% each.
Fastenal and Electronic Arts have jumped more than 6%, with software names CrowdStrike and Palo Alto Networks on track for gains of 5% or greater.
Adobe's added 4.4%, while chipmakers Broadcom and KLA Corporation are up 5.5% and 5.1%, respectively, for the week.
Tesla, Marvell Technology and PayPal are among the biggest losers for the week, down about 3%.
— Samantha Subin
Here are some of the names making the biggest midday moves:
To see more stocks moving during the midday, read the full story here.
— Michelle Fox
Treasury yields fell this week from the 16-year highs reached recently. And while yields could go even lower in 2024, Bank of America's Michael Hartnett sees stocks struggling regardless.
"Bond yields may go lower in '24 but no secular bull market until Fed/govts stop playing Superman, put on their 'seatbelts' & express need for lower deficits," he said in a note.
Hartnett also noted that cash and T-bills levels as a percentage of overall BofA assets under management have reached levels not seen since March 2020.
— Fred Imbert, Michael Bloom
Uncertainty around growth and profitability for JD.com has kept Morgan Stanley "waiting for the silver lining." The bank downgraded shares to equal-weight from overweight.
Shares tumbled more than 8% during Thursday's trading session, hitting a 52-week low, and fell another 1.2% in Friday midday trading.
"We have low conviction in a strong recovery in growth in 2024 and beyond," said analyst Eddy Wang. More about the downgrade can be found here.
— Hakyung Kim
Import prices rose much less than expected in September, providing some positive news on inflation trends after a week of somewhat disappointing data.
Prices for U.S. imports increased 0.1% for the month, down from the upwardly revised 0.6% in August and well below the 0.5% estimate from Dow Jones, the Labor Department reported Friday. Excluding fuel, import prices fell 0.2%.
Reports earlier in the week on producer and consumer prices showed inflation slightly higher than expected.
—Jeff Cox
BlackRock's stock fell more than 1% on Friday morning after the asset management giant reported that it suffered net outflows from both its active unit and its index and ETF unit during the third quarter.
"We did have some outflows in our precision ETFs, which is a great example of more people choosing iShares to trade around — actively trading it," CEO Larry Fink said on "Squawk on the Street."
"Every time we've seen this period of time when it was outflows, we see real inflows when sentiment turns," Fink added.
Overall, BlackRock's cash management assets grew more than $15 billion to make the firm positive on a net flow basis for the quarter. Total assets under management rose to $9.1 trillion.
— Jesse Pound
Danish drugmaker Novo Nordisk raised its sales and profit forecast for 2023, citing robust sales of its diabetes and weight loss drugs Ozempic and Wegovy in the U.S.
Shares popped as much as 3% in premarket trading after it said 2023 sales growth is anticipated to be in the range of 32% to 38%, up from a prior range of 27% to 33%. Operating profit growth will come in at about 40% to 46%, compared with an earlier estimated increase of 31% to 37%.
The company's U.S.-traded shares are up more than 48% in the year-to-date period.
—Christina Cheddar Berk
Consumer sentiment slumped in October while inflation expectations spiked, according to the University of Michigan's closely watched survey.
The survey posted a headline reading of 63, down from 68.1 in September and below the Dow Jones estimate for 67.4, a preliminary reading released Friday showed. The current conditions index also moved down, to 66.7 from 71.4.
On inflation, the one-year outlook jumped to 3.8%, up from 3.2% and the highest reading since May. On a five-year basis, the outlook moved up to 3% from 2.8%.
—Jeff Cox
Major stock indexes opened higher on Friday as major banks released earnings.
— Pia Singh