On Friday, both the Nasdaq and the S&P 500 saw significant declines while Treasury yields experienced a dip. Investors grappled with lackluster earnings reports, uncertainties regarding central bank policies, and geopolitical tensions.
Gold and crude oil prices saw gains amidst growing concerns over unfolding turmoil in the Middle East.
Among the three major U.S. equity indexes, only the Dow managed to gain ground. Conversely, the Nasdaq experienced a 2.05% decline, weighed down by megacap tech and tech-related momentum stocks.
This session marked the sixth consecutive day of declines for both the S&P 500 and the Nasdaq, marking the longest losing streak since October 2022.
For the week, the S&P 500 and the Dow witnessed their most substantial weekly percentage losses since March 2023, while the Nasdaq recorded its largest weekly drop since November 2022.
Tensions in the Middle East seemed to stabilize after Tehran played down Israel’s retaliatory drone strike against Iran. This move appeared to be aimed at avoiding further escalation in the region.
Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, commented on the heightened concerns, stating, “The level of concern in the Middle East is higher than it was at any time since Oct 7.”
Analysts have tempered their expectations for first-quarter earnings growth, with aggregate S&P 500 earnings now projected to grow by 2.9% year-on-year, down from the 5.1% estimate on April 1, according to LSEG.
Goolsbee, the Chicago Federal Reserve President, asserted on Friday that the Fed’s current restrictive policy stance is “appropriate” given the strength of the economy and the slower-than-expected progress in bringing inflation down towards its 2% target.
The Dow Jones Industrial Average rose by 211.02 points, or 0.56%, to 37,986.4, while the S&P 500 lost 43.89 points, or 0.88%, to 4,967.23. The Nasdaq Composite dropped 319.49 points, or 2.05%, to 15,282.01.
European shares hit their lowest level in over a month but closed off their intraday lows as concerns over Middle East tensions eased and solid earnings provided some support.
In other markets, emerging market stocks declined by 1.30%, while MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.61% lower, and Japan’s Nikkei lost 2.66%.
Treasury yields edged lower as investors sought safe-haven assets amidst the potential escalation of the Middle East conflict.
The dollar remained relatively stable after initial turbulence following Israel’s drone attack on Iran. The dollar index fell marginally by 0.01%, with the euro up by 0.08% to $1.0652. The Japanese yen strengthened by 0.02% against the greenback at 154.63 per dollar, while sterling traded at $1.2371, down 0.51% on the day.
Crude oil prices initially dipped due to eased supply concerns following Iran’s restrained response but settled slightly higher amid lingering geopolitical uncertainties.
U.S. crude rose by 0.50% to settle at $83.14 per barrel, while Brent settled at $87.29 per barrel, up 0.21% on the day.
Gold continued its upward trajectory, marking its fifth consecutive weekly gain, with spot gold adding 0.4% to reach $2,386.49 per ounce.
