Stocks retreated on Friday, closing out a turbulent week as Nvidia's incredible run took a breather.
The S&P 500 lost 0.65% to 5,123.69, while the Nasdaq Composite slipped 1.16% to 16,085.11. Both swung into negative territory after rising to new all-time highs earlier in the session. The Dow Jones Industrial Average relinquished 68.66 points, or 0.18%, to end at 38,722.69.
All three major indexes finished the choppy week lower. The broad S&P 500 pulled back by 0.26% this week, while the blue-chip Dow and tech-heavy Nasdaq fell 0.93% and 1.17%, respectively. That decline marked the worst week for the 30-stock Dow since October.
Stocks were hurt Friday as an earlier rally in Nvidia lost steam. The artificial intelligence darling finished down more than 5% in its worst session since late May.
Despite that breather, Nvidia shares still finished up more than 6% on the week. It's part of a monster rally that has added more than $1 trillion to the stock's market cap in just the new year alone.
"It doesn't mean that the longer-term upside potential is over," said Sam Stovall, chief investment strategist at CFRA Research, of Nvidia's Friday move. "It just says that maybe we've gotten ahead of ourselves: We've gotten to an overbought situation, and it's time to take some profits."
Though Nvidia dragged on tech, Apple rose 1% in Friday trading. With that gain, the mega-cap stock snapped its longest losing streak since early 2022 at seven days. But shares were still down nearly 5% on the week, making it the worst performer in the 30-stock Dow.
The February jobs data released Friday morning offered some conflicting signals as to when it will be safe for the Federal Reserve to start cutting interest rates.
On one hand, the number of jobs added last month was much more than expected, coming in at 275,000 compared with an estimate of 198,000 from economists polled by Dow Jones. This data can imply the economy is still running pretty hot.
But the unemployment rate unexpectedly ticked higher to 3.9% and wage growth was lighter than feared, offering morsels of hope that inflation has cooled enough to appease the Fed. Data on January jobs growth was also revised lower.
"In sum, people will be able to take away whatever message they want to from today's reports," said George Mateyo, chief investment officer at Key Private Bank. "However, we think the data skews positive and should provide sufficient confidence to the Fed that a modest adjustment to interest rates is appropriate."
The three major indexes finished Friday's session down.
The Dow ended lower by around 0.2%. The S&P 500 and Nasdaq Composite slipped 0.7% and 1.2%, respectively.
Following a choppy week, the major indexes also all finished in the red on that front. It marked the worst week since October for the Dow.
— Alex Harring
Friday's jobs data illustrates that the Fed is actually achieving its so-called dual mandate of having high employment while keeping inflation tame, said Jamie Cox, managing partner for Harris Financial.
"Labor is rolling, and wage inflation is rolling over — the Fed is threading the needle on its dual mandate," Cox said. "No one expected this result, but it's happening."
— Alex Harring
The Dow is on pace to post its worst weekly performance since October.
The blue-chip index is down about 0.9% on the week. If that holds through close, it will be the 30-stock average's worst week since late October. During that week, the Dow slipped 2.1%.
— Alex Harring
President Biden's call for more taxes on high-income Americans during his State of the Union address Thursday night doesn't appear to be souring investor sentiment, said Ryan Detrick, chief market strategist at Carson Group.
"President Biden noted the potential for higher taxes on the wealthy, but for now, that isn't upsetting the apple cart for markets," he said.
— Alex Harring
Crude oil futures posted a weekly loss as lackluster demand out of China collided with a market that the International Energy Agency views as well supplied.
The West Texas Intermediate contract for April fell 92 cents, 1.2%, to settle at $78.01 a barrel on Friday. The Brent contract for May dropped 88 cents, or 1.1%, to settle at $82.08 a barrel.
U.S. crude and the global benchmark lost 2.45% and 1.8%, respectively, for the week.
"The big burst of China demand recovery continues to just not pan out and without it, it's going to be hard for these prices to sustain themselves and recover further and get WTI back above 80 bucks," John Kilduff, founding partner at Again Capital, told CNBC.
— Spencer Kimball
The S&P 500 is on track to end the week higher. If that holds, it will have been up 17 in the last 19 weeks, a first for the broad index since 1964.
— Lisa Kailai Han, Nick Wells
The three major indexes were mixed entering the last hour of the trading day and week.
On the day, the Dow is the only index on pace for gains. The index was up 0.3%, while the S&P 500 and Nasdaq Composite slipped 0.2% and 0.5%, respectively.
For the week, the S&P 500 was the sole average tracking for gains, higher by around 0.2%. The Dow and Nasdaq were each about 0.5% in the red.
— Alex Harring
Technology stocks were among the biggest winners and losers within the Dow this week.
The 30-stock index was on track to end the week down 0.8%. It was hurt in part by drops of more than 3% in tech stocks Salesforce and Apple, the two worst performing members. Retailer Nike also weighed on the average with a slip of 3%.
But on the other end of the spectrum, IBM was poised to post the best performance of Dow members this week with an advance of nearly 4%. Cisco was the next biggest gainer, adding more than 2.5%.
— Alex Harring
Investors may want to consider taking some profits in Nvidia despite is long-term AI growth potential, according to Greg Bassuk, chief investment officer at AXS Investments.
"Nvidia's leadership status in this space supports more room for the stock to rise in the months ahead," he said. "However, investors would be prudent to consider some Nvidia profit-taking, as well as investments that provide Nvidia downside exposure so as to profit from the Nvidia pull-back."
Nvidia pulled back 4% during Friday's session, but headed for a 6% weekly gain and its ninth straight winning week as bets on artificial intelligence show no signs of waning.
The company's played a pivotal role in the continuation of 2023's AI-fueled rally, and that hasn't gone unnoticed. Year to date, the company's accumulated more than $1 trillion in market capitalization and is responsible for roughly 60% of the S&P 500's price gains year to date, according to FactSet data. It has also accounted for 70% of the Nasdaq 100's 2024 wins.
"As Nvidia propelled the S&P 500 to a new record close this week, both Wall Street and Main Street have been witnessing Nvidia's central role in moving the markets and the averages," Bassuk said.
Nvidia shares have rallied more than 76% year to date and 261% over the last year.
— Samantha Subin
These are the stocks making the biggest moves during midday trading:
Read the full list of stocks on the move here.
— Samantha Subin
The S&P 500 flickered around its flatline for the week as its 11 sectors diverged.
On one hand, utilities and materials led the index higher this week, with the sectors gaining more than 3% and 2%, respectively. Real estate and consumer staples also gave the broad index upward momentum, as each added more than 1%.
But drops among a handful of sectors mitigated those advances. Most notably, consumer discretionary was the worst performing sector with a slide of more than 2%.
— Alex Harring
Nvidia shares rolled over during midday trading, falling more than 4% and giving back earlier gains.
The move in Nvidia shares comes as the chipmaker heads for an 8% weekly gain and its ninth straight winning week. The company's been responsible for helping fuel the continuation of 2023's rally into the new year.
Other semiconductor stocks also pulled back during Friday's session. Advanced Micro Devices was last down 1.6%, while ASML and Intel slumped more than 4% each. Broadcom dropped 7% after issuing in-line full-year guidance. Marvell Technology shed 10% on a weaker-than-expected outlook for the first quarter.
The VanEck Semiconductor ETF (SMH) was last down 3.6%.
— Samantha Subin
Small-cap stocks as measured by the Russell 2000 Index have outperformed large-cap counterparts (S&P 500) since the market low on Oct. 27 by more than 2 full percentage points.
Through Thursday's close, small-caps have climbed 27.36% since late Oct. vs 25.26% for the S&P 500.
"The Russell 2000 had a 'breakaway' move on Thursday, gapping up for the fourth time since February 13," wrote Larry Jeddeloh of The Institutional Strategist on Friday. Despite smallcaps' outperformance, the iShares Russell 2000 ETF "still trades at a major valuation advantage to large caps. The valuation gap between U.S. large caps and small caps is mirrored in a number of other markets, including Australia," he noted. "[I]t's all about large caps - until it isn't. The same theme is true in the U.S. and European markets."
— Scott Schnipper
Eli Lilly shares are down more than 2% in trading after the Food and Drug Administration said it would continue to review the safety and effectiveness of the company's Alzheimer's treatment. The news came as a surprise and it's hard to gauge the length of the delay, but analysts said it won't hurt Lilly's 2024 forecast.
"In our view this is an incremental negative surprise, but we would view any weakness in LLY as a buying opportunity given Donanemab is not the key driver of the stock," said Morgan Stanley's Terence Flynn in a research note.
The bad news for Lilly is good news for Biogen. Flynn said he could see BIIB shares jumping as much as 5% on the news as the delay will give it more time to capture market share with its rival treatment Leqembi. Indeed, Biogen shares were up more than 2% on Friday morning, but the stock is down nearly 13% year to date.
—Christina Cheddar Berk
The Invesco Solar ETF (TAN) added nearly 2% on Friday as the clean energy trade was set to finish the week strong.
Among the fund's top holdings, Enphase Energy and Solaredge Technologies both jumped more than 3%.
This would be the third straight positive session for TAN, which rose more than 2% on each of the previous two days.
— Jesse Pound
Apple advanced on Friday, putting the key technology name on pace to snap its longest losing streak in over two years.
The mega-cap stock rose about 1.5% in late morning trading. If that holds, it would mark the equity's first positive day in the last eight. The last time the stock has fallen for seven consecutive sessions was in January 2022.
Friday's move offers modest relief amid a rough period for Apple, with shares down around 11% in 2024.
— Alex Harring, Nick Wells
Nvidia had another good week.
That's no surprise for the chipmaker that's rallied nearly 300% over the last year on its artificial intelligence potential.
The AI darling appeared to separate itself from the pack this week, surging 17% for its best weekly performance since May 2023. Meanwhile, the Technology Select Sector SPDR Fund (XLK) looks poised to finish the week slightly lower.
Nvidia also outperformed its Magnificent 7 peers, and is one of only two stocks in the group — along with Meta Platforms — slated to cap off a positive week.
As Nvidia rallied, Tesla sank 11% and Alphabet declined 1.7%. Apple shed 5% and notched its longest losing streak in over two years. Software stocks also underperformed, with MongoDB, Palo Alto Networks and Zscaler on pace for weekly declines exceeding about 6%.
— Samantha Subin
The February jobs report released this morning may have appeared strong at first glance, but a closer look reveals "disturbingly weak" data, according to Academy Securities.
Nonfarm payrolls rose by 275,000 last month, far surpassing the payrolls growth expectation of 198,000 from economists polled by Dow Jones.
However, a slight rise in the unemployment rate, as well as sizable downward revisions in data from the past two months, suggests the labor market is weaker than investors previously thought, according to Peter Tchir, head of macro strategy at Academy Securities.
Other troubling signs include a decline in hourly earnings. Tchir also noted that the "quit" rate in the Job Openings and Labor Turnover Survey (JOLTS) data earlier this week implies workers "don't think it is easy to find another job."
All this suggests the jobs market is "slightly 'below normal'" and "heading the wrong direction" at a time when consumer delinquencies is rising, Tchir said. The development could be "weak enough" to add downside pressure to equities, he added.
"[What] initially looked like 'good' news is actually mediocre, at best," Tchir wrote in a Friday note titled "A Disturbingly Weak Report." "How the markets treat that news remains to be seen, but I'm expecting a mediocre response, regardless of the fact that today's data will help the Fed lean towards cuts."
— Sarah Min
The S&P 500 and Nasdaq Composite opened Friday's session in the green.
The broad S&P 500 added around 0.1% shortly after 9:30 a.m. ET, while the technology-heavy Nasdaq climbed 0.2%. The Dow, meanwhile, flickered around its flatline.
Following Friday's open, both the S&P 500 and Nasdaq are on track to finish the week with gains of 0.6% and 0.3%, respectively. The Dow has lagged, down around 0.7% on the week.
— Alex Harring
These are some of the companies making headlines before the bell:
The full list can be found here.
— Hakyung Kim