The S&P and Nasdaq ended the week down 1.55% and 3.11%, respectively. Stocks fell on Friday, capping a volatile week of trading, a day following posting a historic high as investors digested inflation expectations.
On Friday, the Dow Jones index fell 403.89 points, or 1.34%, to end the day at 2,9634.83 points. However, the index rose by 1.15% during the week. On the other hand, “Standard & Poor’s” decreased by 2.37% to 3583.07 and achieved a seventh negative closing in eight days. The Nasdaq Composite Index fell 3.08%, ending the day at 10,321.39, affected by the losses of “Tesla” and “Lucid Motors”, which fell 7.55% and 8.61%, respectively.
Stocks fell to session lows following a University of Michigan consumer survey showed inflation expectations were rising, a sentiment that the Federal Reserve will likely be watching closely. The tech-heavy Nasdaq index led the declines as growth firms are more sensitive to higher interest rates.
Meanwhile, bond yields soared, with the 10-year US Treasury bond rate rising to 4% for the second time in two days as investors react to rising inflation expectations.
Markets fell throughout the week as investors weighed new inflation data that will inform the Fed as it continues to raise interest rates to cool price increases. On Thursday, stocks witnessed a major turnaround as the Dow Jones finished the session 827 points higher following dropping more than 500 points at its lowest level on the day, the S&P 500 rose 2.6% to break its six-day losing streak, and the Nasdaq Composite jumped 2.2 %.
Thursday also saw the fifth-largest intraday reversal from the lowest in S&P history, and the fourth-largest reversal for the Nasdaq, according to SentimenTrader.
European stocks
European shares ended trading Friday, the end of trading week, on the rise, supported by an initial payment following the British government backed down from tax cuts, but the impact of this payment faded in light of the continuing uncertainty surrounding its financial position.
The European Stoxx 600 index closed up 0.6% to achieve gains for the second consecutive session, but it moved away sharply from the high levels recorded in the session immediately following British Prime Minister Liz Terrace announced the cancellation of some provisions of the government’s financial program.
Terrace dismissed Finance Minister Kwasi Quarting and said Britain would press ahead with plans to raise corporate taxes.
Sterling once morest the dollar fell 1.2% near session lows, while British 2-year bond yields fell in recent trade following reversing gains already before the TRACE announcement. The British FTSE 100 index of leading stocks also fell from its highest levels during the session, and ended with an increase of 0.1%.
The pan-European Stoxx 600 is down 19.8% so far this year, with markets feeling nervous regarding massive interest rate increases around the world pushing the economy to the brink of recession. An energy crisis exacerbated by the Russian-Ukrainian conflict has also heightened concerns regarding an economic slowdown in Europe. However, Friday’s gains helped the Stoxx index erase some of the losses it had incurred in the first three days of the week.
Most of the sectors listed on the STOXX 600 rose, led by real estate and utilities shares. On the corporate front, Temenos tumbled 19% following the Swiss banking software group cut its indicative profit estimates for 2022.
