Friday’s trading session witnessed a mixed performance on Wall Street as the S&P 500 (^GSPC) officially entered correction territory, capping off a challenging week for the financial markets. Despite earlier gains, the S&P 500 closed down approximately 0.5%, while the Dow Jones Industrial Average (^DJI) plummeted by about 1.2%, shedding over 350 points. In contrast, the Nasdaq Composite (^IXIC) managed to hold onto gains, closing up approximately 0.4%, buoyed by impressive earnings reports from tech giants Amazon (AMZN) and Intel (INTC).
The week had been tumultuous for investors, primarily triggered by mixed earnings from megacap tech companies, leading the S&P 500 to enter a correction phase. Market sentiment had been swaying as investors grappled with the prospects of Big Tech’s performance.
Adding to the market uncertainty, the Federal Reserve’s preferred inflation metric released on Friday revealed the sharpest monthly increase in prices since May. However, annual price increases continued to moderate in September. This dynamic further emphasized the likelihood of the central bank maintaining higher interest rates for an extended period. The Core Personal Consumption Expenditures (PCE) Index, excluding volatile food and energy categories, reported a 0.3% price increase in September, with a 3.7% rise from the previous year. The upturn was driven by categories such as cars, prescription drugs, and travel. On a headline basis, which includes all categories, PCE increased by 3.4% over the last year and 0.4% month-over-month. September’s annual rise in “core” PCE marked the smallest increase since May 2021, signifying the third consecutive month of price growth at a decelerated annual rate.
The mixed performance of the stock markets on Friday rounded off a challenging week for investors. The S&P 500 officially entered into correction territory, with the index now down nearly 10% from its peak in September. Simultaneously, the tech-heavy Nasdaq Composite has plunged into a more substantial correction, with a 13% decline from its all-time high set in late August. While the strong earnings reports from megacap tech giants like Amazon and Intel provided some relief to investors, concerns regarding future performance and the potential consequences of an extended market downturn contributed to a mixed closing on Friday.
In summary, the financial markets experienced a week of volatility and uncertainty, with the S&P 500 officially entering correction territory. The tech sector’s challenges and the Federal Reserve’s inflation data have made investors cautious, ultimately leading to a mixed market performance as the week concluded.
Source: Yahoo Finance
