- The S&P 500 and Nasdaq composite indexes declined for the third straight week on falling tech giants and weakening economic data.
- Mega-cap tech stocks led indexes lower as investors continued to shun lofty valuations and look for returns elsewhere.
- Traders hoping for a stimulus breakthrough had little to cheer heading into the weekend. Democrats and Republicans remain hundreds of billions of dollars apart in their respective proposals.
- The deadlock comes after weekly jobless claims and retail sales data pointed to a slowing economic recovery earlier in the week.
- Watch major indexes update live here.
The S&P 500 slid for a third straight week as sinking tech giants continued to pull major indexes from record highs.
Mega-cap companies including Apple,Microsoft, and Facebook led the slump once again. The market darlings have played major roles in recent weeks’ declines. While crowding in the stocks helped drive the market’s rapid rebound from virus-induced lows, investors have since shunned their sky-high valuations. As traders dumped the popular names, tech-heavy indexes tumbled just as quickly.
Oracle slid in Friday trading after the US government said it will block all TikTok and WeChat downloads in the country starting Sunday. The surprise announcement arrives as Oracle closes in on finalising its partnership with TikTok-parent ByteDance.
Here’s where US indexes stood at the 4 p.m. market close on Friday:
- S&P 500:3,319.43, down 1.1%
- Dow Jones industrial average: 27,657.35, down 0.9% (245 points)
- Nasdaq composite:10,793.28, down 1.1%
“Mega-cap tech stocks are dragging everyone down right now,” Edward Moya, senior market analyst at OANDA, said. “The outlook is foggy for big-tech as the latest TikTok developments continues to add further strain to US-China trade relations and as Wall Street needs to start pricing in a Blue wave in November that would trigger higher taxes and tougher regulations.”
All 11 S&P 500 sectors posted losses, though heath care stocks nearly avoided a downturn. Real estate and utility shares fell the most through the session.
Market participants continue to look for any sign of progress toward a near-term stimulus deal. Congress remains locked in negotiations over new spending as the pace of economic recovery slows. Indicators including jobless claims and retail sales showed mild improvement over the week, signalling the bump from March’s CARES Act has largely played out.
The Fed announced Wednesday it plans to hold rates close to zero until well into the US economic rebound. With monetary policy set to stay accommodative for years, all eyes are on legislators to reinstate aid programs including expanded unemployment benefits, economic relief payments, and small business stimulus.
White House chief of staff Mark Meadows indicated on Thursday that the Trump administration is willing to back a $US1.5 trillion bill. The target is higher than the White House’s previous goal of $US1.3 trillion, but Democrats and Republicans remain divided on a final figure and allocations for federal funds.
The stalemate follows weaker-than-expected readings for weekly jobless claims and retail sales earlier in the weak. Still, some indicators pointed to encouraging trends across consumers. The University of Michigan’s consumer sentiment index gained to 78.9 in September from 74.1, hitting its highest point in six months. Economists expected a reading of 75, according to Bloomberg data.
Gold gained as much as 0.8%, to $US1,960.14 per ounce, remaining in a narrow trading range between $US1,900 and $US2,000. Treasury yields wavered and the US dollar gained.
Oil prices slid on reports of exports resuming in Libya reignited fears of a supply glut. West Texas Intermediate crude fell as much as 1.6%, to $US40.30 per barrel. Brent crude, oil’s international benchmark, decreased 1.8%, to $US42.53 per barrel, at intraday lows.
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