US Stock Market – Global market: On Friday, the US stock markets closed lower, influenced by Federal Reserve Chairman Jerome Powell’s statement regarding the potential for future interest rate hikes. While Powell indicated that the central bank would proceed with caution, his mention of possible rate increases caused a broad selloff and impacted all three major US stock indexes.
The Nasdaq Composite Index experienced the largest decline, with technology stocks such as Microsoft Corp, Tesla Inc, and Nvidia Corp leading the losses. This week, weakness was observed across all three key American indices on a weekly basis, breaking their previous rally streaks. Notably, the Nasdaq broke its eight-week rally, while the S&P 500 ended its five-week rally.
All 11 sectors of the S&P 500 index recorded declines, contributing to the overall market downturn. The Dow Jones Industrial Average fell by 0.65 percent, or 219.28 points, closing at 33,727.43. The S&P 500 decreased by 0.77 percent, or 33.56 points, ending at 4,348.33. Similarly, the Nasdaq Composite lost 1.01 percent, or 138.09 points, settling at 13,492.52. Utility shares experienced the highest percentage loss among the sectors of the S&P 500.
Tech Stocks and Chip Troubles
Tech stocks faced additional challenges due to issues related to chips. The Philadelphia SE Semiconductor Index declined by 1.8 percent, reflecting the impact of the chip-related trouble on the sector. However, there were some positive performances as well. Used car marketplace CarMax Inc reported better-than-expected quarterly profit, leading to a 10.1 percent increase in its shares. On the other hand, Starbucks Corp saw a 2.5 percent decline after an employee strike was announced by the employee union.
Increased Market Volatility
The CBOE Market Volatility Index, often referred to as the fear index, rose by 0.53 points to close at 13.44. Within the S&P 500, 18 stocks reached new 52-week highs, while four stocks hit new lows. In the Nasdaq Composite, 35 shares achieved new 52-week highs, while 138 shares hit new lows.
Trading Volumes and Russell 2000 Restructuring
The Russell 2000 index completed the restructuring of its stocks, which led to an increase in trading volumes. On Friday, the volume on US exchanges reached 15.93 billion shares, surpassing the average of 11.68 billion shares over the past 20 trading days.
In conclusion, the US stock markets closed lower as Federal Reserve Chairman Jerome Powell’s statement signaled potential future interest rate hikes. The decline impacted all three major indexes, with technology stocks and chip-related troubles facing particular challenges. The market experienced increased volatility, and trading volumes were elevated due to the restructuring of the Russell 2000 index.