Stocks sold off Friday as inflation and geopolitical worries once again dented investor sentiment on Wall Street. A broad decline in major bank shares also weighed on the market.
The Dow Jones Industrial Average slid 475.84 points, or 1.24%, closing at 37,983.24. The S&P 500 tumbled 1.46% at 5,123.41. The Nasdaq Composite pulled back by 1.62% at 16,175.09.
At one point in the trading session, the Dow was down by nearly 582 points, or 1.51%. The S&P 500 slid as much as 1.75%.
Week to date, the broad market index dropped 1.56%, and the 30-stock Dow fell 2.37%. Meanwhile, the tech-heavy Nasdaq is 0.45% lower for the week.
JPMorgan Chase shares declined more than 6% after the banking giant posted its first-quarter results. The bank said net interest income, a key measure of what it makes through lending activities, could be a little short of what Wall Street analysts are expecting in 2024. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy.
Wells Fargo slipped 0.4% after reporting its latest quarterly figures. Citigroup dropped 1.7% despite posting a revenue beat.
Oil prices continued their rise on reports that Israel is preparing for a direct attack by Iran this weekend, in what would be the biggest escalation of tensions in the region since the outbreak of the Israel-Hamas war last October. U.S. crude settled at $85.66 a barrel after rising above $87.
That, coupled with fresh U.S. imports data, added fuel to inflation concerns that have put pressure on the market.
"We're getting further risk off sentiment heading into the weekend. You're seeing there's a flight to safety trade, with the dollar stronger, and we're seeing equities sell off," said Rob Haworth, U.S. Bank Wealth Management senior investment strategist.
"That comes on the heels of the inflation data that tells us the economy's still pretty hot and inflation is sticky; that's what led [investors] to really adjust their expectations around the Fed. … That's some of why they're getting cautious headed into the weekend," said Haworth.
Consumers are also growing worried about the persistent inflationary pressures. The consumer sentiment index for April came in at 77.9, below the Dow Jones consensus estimate of 79.9, according to the University of Michigan's Surveys of Consumers. Year-ahead and long-run inflation expectations also ticked up, reflecting frustrations over sticky inflation.
U.S. stocks ended Friday's session in the red.
The Dow Jones Industrial average dropped 475.84 points, or 1.24%. The S&P 500 shed 1.46%, and the Nasdaq Composite declined 1.62%.
All three major averages notched weekly losses. The 30-stock Dow ended 2.37% lower for the week, with the S&P 500 and tech-heavy Nasdaq also down 1.56% and 0.45%, respectively.
— Hakyung Kim
This year's market rally is far from a broad-based one, according to Barclays.
The percentage of constituents in the S&P 500 outperforming the index has risen from very low levels, but still remains far from the highs of the past few years, such as during the broad-based rally in 2021, analyst Venu Krishna wrote in a Friday note.
"The U.S. equity rally is finally starting to broaden out, but we are starting from extraordinarily narrow levels and have a ways to go before establishing a truly broad base," Krishna said. "In the meantime, rates uncertainty is a growing risk, particularly as correlation tends to jump during selloffs."
The analyst added that the correlation between market leaders and the rest of the index jumps during sell-offs, which is a "key risk" with the current market rally having yet to establish a broad base. This year, the S&P 500 is up nearly 7.5%.
— Pia Singh
The first-quarter earnings season is only just getting started, with 6% of the S&P 500 reporting results so far.
Based on the blended growth rate, earnings are expected to grow 2.7% from a year ago, while revenues are expected to grow 3.3%, according to LSEG data.
Communication services is expected to see the biggest year-over-year earnings growth at nearly 27%.
— Samantha Subin, Robert Hum
Thursday's broad-market bounce back was a head fake, according to Wolfe Research's technical analysis team.
"Everyone can relax…after 2-weeks of agita and what must have seemed like an eternity for many, the MAG7 basket finally went out at fresh all-time highs, led by Amazon's first record closing high since November of 2021," analyst Rob Ginsberg wrote in a Thursday note. "In all seriousness, outside of these stocks ripping, today was a pretty uninspiring day following yesterday's sell off."
Ginsberg pointed out that although the S&P 500 gained 0.7% on Thursday, rebounding from a sell-off fueled by inflation concerns, the Invesco S&P 500 Equal Weight ETF is trading back to its lows and had closed in the red. He added that declining volume outpaced advancing volume on Thursday.
— Pia Singh
Friday's sell-off in the S&P 500 was broad-based. In afternoon trading, there were 476 names last trading in negative territory, according to FactSet data. All 11 S&P 500 sectors were lower as well, with materials and information technology the greatest laggards.
JPMorgan was among the biggest decliners in the broad market index, down more than 5% after releasing net interest income guidance that disappointed investors. Otherwise, the major bank had beat expectations on the top and bottom lines.
Notably, Apple was among the few advancers, last rising just 0.3%. Insurance companies such as Progressive and Allstate were outperformers, gaining roughly 1% each. Occidental Petroleum gained 0.4%.
— Sarah Min
The majority of the "Magnificent Seven" stocks struggled amid Friday's sell-off.
Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla all traded down more than 1%. Apple was the only member on track for gains with a 0.5% advance.
Despite Friday's moves, all but two of the megacap tech names are still on track to finish the week in the green. Microsoft has slipped about 1% this week, while Meta has dropped more than 2%.
— Alex Harring
The S&P 500 tumbled as much as 1.7% Friday afternoon, dipping below its 50-day moving average for the first time since Nov. 3, 2023.
The 50-day moving average is a technical indicator traders watch to measure a short-term trend for a given asset.
If the S&P 500 were to close below the 50-day moving average, it could portend the start of a downward trend. The last time the broad-market index closed below that level was Nov. 2, 2023.
— Darla Mercado, Nick Wells
The S&P 500 is headed for a losing week, with the broad index on track for a 1.5% loss.
Globe Life is the biggest laggard in the index, headed for a nearly 52% weekly loss. Solventum and CarMax have slumped about 12% each.
Arista Networks and Zoetis have shed about 9% each this week, while Deckers Outdoor and CVS Health have declined more than 8%.
Other notable laggards include Builders FirstSource, Invesco, MGM Resorts and Paramount Global, with shares down more than 7%.
— Samantha Subin
These are the stocks moving the most in midday trading.
Read the full list of stocks moving here.
— Lisa Kailai Han
Twelve stocks in the S&P 500 hit new 52-week highs during Friday's session. Of these names, five tickers traded at new all-time highs.
Here were the five stocks that hit this milestone:
— Lisa Kailai Han, Christopher Hayes
The Dow is on pace to see outsized losses this week as more than two out of every three of its members trade down.
The blue-chip index has slipped more than 2% so far this week. If that holds, it will be the biggest drop of the three major indexes.
Intel, Boeing and JPMorgan led the 30-stock index lower, with all three sliding more than 6%. Verizon was the next-worst performer at more than 5% lower.
Of the handful of names bucking the downtrend, some were able to see notable gains. Nike climbed about 4%, while Apple added 3.5%.
— Alex Harring
As another earnings season kicks off, UBS expects corporate earnings to grow from 7% to 9%, similar to the growth rate in the fourth quarter of 2023. However, this time around, the growth should diversify, the firm said.
"Growth is starting to broaden out with non-Magnificent 7 stocks poised to generate positive, albeit modest, growth for the first time since 4Q22. This trend should accelerate over the balance of the year," David Lefkowitz, chief investment officer of U.S. equities, wrote in a Thursday note.
Lefkowitz says solid earnings growth, combined with forecast interest rate cuts by the Federal Reserve and artificial intelligence enthusiasm, should continue to support equity gains ahead.
— Hakyung Kim
Gold hit a fresh all-time high Friday on the back of elevated demand for safe-haven assets amid geopolitical tensions. The bullion reached an intraday peak of $2,418.2, gaining 2.8% week to date and on pace for its third straight week of gains.
Spot gold also hit a record high of $2,400.35 earlier in the session. Prices are up nearly 3% for the week.
— Yun Li, Gina Francolla
The CBOE Volatility Index, or VIX, rose to its highest level on Friday since October 2023.
The VIX is a popular gauge of uncertainty in the market. Using S&P 500 stock index options prices, it measures the market's expectations of near-term volatility.
— Hakyung Kim
JPMorgan shares tracked for their worst session in more than two years as investors reacted to the bank's earnings report.
The bank's shares dropped around 6% in midday trading. If that holds through the closing bell, it will mark the worst day since Jan. 14, 2022, when the stock lost 6.2%.
That drop came as JPMorgan said net interest income, a key measure of what it makes through lending activities, could be somewhat short of what Wall Street expects this year. CEO Jamie Dimon also warned about persistent inflationary pressures weighing on the economy.
Still, the financial giant beat expectations on both lines. The stock is up more than 8% compared with the start of 2024.
— Alex Harring
The dollar index, which tracks the U.S. dollar against six major currencies, is up 1.5% this week. Inflation concerns have attracted investors to the dollar, viewed as a safe-haven asset — but there are signs of a looming pullback, according to Joe Tuckey, head of FX analysis at Argentex Group PLC.
"Markets had no choice but to pile into the dollar this week as chances of an early summer rate cut have evaporated," said Tuckey. "That said, another 0.5% move will see the dollar firmly entering 'overbought' territory, as the DXY (Dollar index) registers above 70 on the RSI. Such overbought readings can act as a precursor to a dollar retracement."
— Hakyung Kim
Exxon Mobil hit an all-time high Friday as crude oil prices rallied on red-hot tensions in the Middle East.
Exxon stock hit an intraday high of $123.74 as U.S. crude oil broke above $87 a barrel on reports that Israel is preparing for an imminent attack by Iran. Exxon was last up 1.48% at $123.59 a share.
The energy sector rose just under 1% as the broader S&P 500 fell 0.7% on persistent inflation concerns. APA Corporation, Devon Energy and Occidental Petroleum led the energy sector's move higher.
— Spencer Kimball
The consumer sentiment index for April came in at 77.9, slightly below a Dow Jones consensus estimate of 79.9, according to the University of Michigan's Surveys of Consumers.
"A slight uptick in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled. Overall, consumers are reserving judgment about the economy in light of the upcoming election, which, in the view of many consumers, could have a substantial impact on the trajectory of the economy," Surveys of Consumers Director Joanne Hsu said in a statement.
Year-ahead inflation expectations rose to 3.1% from 2.9%. Long-run expectations also ticked up to 3% from 2.8%.
— Fred Imbert
Barclays analyst Anshul Pradhan said inflation is clearly on a different track than the Federal Reserve had planned for after the data this week. In a higher-for-longer environment, he said investors should continue being short on the U.S. 10-year Treasury, as the firm has advised over the past several weeks.
"Despite the sell-off, financial conditions remain easy," Pradhan wrote to clients. "We believe inflation progress will require tighter financial conditions, which should entail still higher long-term rates."
— Alex Harring
U.S. stocks declined in their start to Friday's trading session.
The Dow Jones Industrial Average fell 258 points, or 0.7%. The S&P 500 and Nasdaq Composite shed 0.7% and 0.9%, respectively.
— Hakyung Kim