On the last trading day of the week, stocks stumbled into negative territory, primarily dragged down by a persistent sell-off in Big Tech shares. The S&P 500 slipped below the psychologically significant 5,000 mark, shedding about 0.4% of its value, while the Nasdaq Composite took a more pronounced hit, plummeting over 1%. In contrast, the Dow Jones Industrial Average managed to eke out a modest gain of 0.4%.
The downturn in sentiment can be traced back to disappointing earnings from streaming giant Netflix (NFLX), which ignited concerns among investors regarding the upcoming corporate earnings season. Netflix shares plummeted by 7%, setting a somber tone for other tech stocks. Nvidia (NVDA), Apple (AAPL), and Amazon (AMZN) all followed suit, with losses exceeding 1%.
Adding to the market’s unease were geopolitical tensions, as Israel’s retaliatory strike on Iran rattled traders overnight, triggering a brief flight to safe-haven assets like gold. Although Iran confirmed the drone attack and claimed it failed, the incident only heightened investor anxiety amid an already uncertain landscape marked by looming Federal Reserve interest-rate decisions.
Despite the prevailing headwinds, there were some bright spots in the market. Procter & Gamble (PG) raised its full-year profit forecast, offering a glimmer of optimism despite missing quarterly sales estimates. Similarly, American Express (AXP) reported a profit beat, fueled by continued spending from affluent consumers.
In the bond market, US government bonds retraced nearly all gains from their recent rally, with the yield on the 10-year Treasury rebounding to trade around 4.6%, following a 14 basis points decline.
Commodities experienced mixed movements, with Brent crude futures (BZ=F) edging up by 0.4% to approximately $87 a barrel, while West Texas Intermediate crude futures (CL=F) climbed 0.5% to around $83 a barrel. Gold (GC=F) prices moderated slightly after earlier gains, but still managed to trade up by 0.3%.
As the trading week concludes, investors remain cautiously optimistic, navigating through a maze of earnings reports, geopolitical tensions, and monetary policy uncertainties. The Big Tech sell-off casts a shadow over market sentiment as investors brace for further volatility in the sessions ahead.
