Wall Street see-sawed to a lower close on Friday, capping a tumultuous week during which benchmark Treasury yields hit 16-year highs and investors digested the Federal Reserve’s hawkish outlook revisions. The S&P 500 and the Nasdaq posted their most considerable weekly losses since March.
The market gyrated as relief that signs of peaking inflation had eased vied with fears that policy tightening by the Fed could tip the economy into recession. Technology stocks rebounded, but gains were tempered by concerns that a slowing economy will prompt higher interest rates.
Investors were also digesting reports on earnings from cruise ship operator Carnival and Nike. Both companies reported bigger-than-expected quarterly losses, with Carnival’s falling profits hitting the broader market. Nike’s results sparked concern about consumers shifting from the athletic brand to other retailers.
On the currency markets, the dollar fell to a new multi-month low against the euro and a three-month low against the Japanese yen. The dollar’s slump was partly driven by expectations that the Federal Reserve will raise interest rates at its next meeting in September. The dollar’s decline also stemmed from concerns about a possible global economic slowdown and a reversal in the recent rally in oil prices.
As the week wore on, the S&P 500 broke below its 100-day moving average – a critical support level – for the first time in nearly two months. That and the S&P 500’s steep weekly losses contributed to a selloff in bond markets. The 10-year Treasury note sank to a record low of 1.65% on Friday, the lowest since August 2022.
Investors were also sifting through an avalanche of economic data this week, with quarterly earnings reports from big-name Dow members and other heavyweights. A batch of data on manufacturing activity and consumer price inflation also weighed on the market.
In other corporate news, Ford shares gained about 2% after the automaker’s unionized workers and management agreed on a labor contract. The pact is the latest in a long series of contract extensions that have kept Ford’s production running.