US Stocks Brace for Toughest Week Since March Amid China Concerns: What's Driving Markets Friday?

Zinger Key Points
  • The major indexes have all fallen below their 50-day moving average, setting off worries concerning a bearish phase.
  • Strong economic data proved to be undoing of stocks as investors worry over the Fed staying on course in the rate-tightening cycle.

The major U.S. stock indices continued to weaken as of 1:30 p.m. ET trading in New York. They are poised to conclude the third consecutive week of losses, also marking the worst weekly performance since March. This losing streak has not been witnessed for the S&P 500 since March 2023 and for the Nasdaq 100 since late 2022, raising concerns of an ongoing trend shift.

China remains in the spotlight as uncertainty escalates over the risk of contagion, which now casts shadows on state-owned enterprises, once relatively untouched by the repayment troubles orbiting the country’s real estate sector.

The stock market session remains relatively flat, while the bond arena witnesses a slight drop in yields driven by global concerns. Nevertheless, 10-year benchmark yields are ending the week around 4.25%, having briefly breached 4.33% and reached heights not seen since October 2007.

Cues From Friday's Trading:

The S&P 500 Index fell 0.2%, down 2.4% this week, the worst since March.

The Dow Jones Industrial Average edged 0.1% lower, down 2.4% for the week.

The Nasdaq 100 Index continued to slid, down 0.4%, hitting lows last seen on June 9, 2023. Small caps were the bright spot, with the Russell 2000 Index rising 0.5%, snapping a four-day losing streak.

US Index Performance On Friday

IndexPerformance (+/-)Value
Nasdaq 100-0.40%14,625.13
S&P 500 Index-0.18%4,356.11
Dow Industrials-0.06%34,446.41
Russell 2000+0.45%1,858.99

Thursday’s Trading In Major US Equity ETFs

  • The SPDR S&P 500 ETF Trust SPY was 0.3% lower to $435.33.
  • The SPDR Dow Jones Industrial Average ETF DIA edged 0.1% down to $344.50.
  • The Invesco QQQ Trust QQQ fell 0.5% to $357, according to Benzinga Pro data.

Looking at S&P 500’s sector ETFs:

  • The Energy Select Sector SPDR Fund XLE was the outperformer for the second day in a row, up 0.7% today.
  • The Communication Services Select Sector SPDR Fund XLC was the laggard, down 1.1%.

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Stocks In Focus:

  • Farfetch Ltd. FTCH tumbled over 40% following its quarterly earnings announcement.
  • Ross Stores, Inc. ROST and Applied Materials, Inc. AMAT advanced about 5.3% and 3%, respectively, following earnings releases.
  • Deere & Co. DE fell 5% despite beating expectations, as the company issued weak guidance for the upcoming quarters.
  • China-listed ADRs fell in a synchronized fashion, dragged down by the country’s economic and financial concerns. Alibaba Group Holdings Ltd. BABA tumbled 3.1%, Inc. JD fell 5.4%, and Li Group Inc. LI fell nearly 5%.
  • Palo Alto Networks, Inc. PANW is due to report after the market close.

Commodities, Bonds, Other Global Equity Markets:

Crude oil rose 1.5%, with a barrel of WTI-grade crude trading at $85.

Treasury yields fell, with the 10-year yield down by 3 basis points to 4.25%. The iShares 20+ Year Treasury Bond ETF TLT was 0.3% higher for the day. 

The U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, held steady. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was also unchanged at 1.0871.

European equity indices were mixed. The SPDR DJ Euro STOXX 50 Etf  FEZ was flat for the day, but down 3.3% for the week.  

Gold, closely tracked by the SPDR Gold Trust GLD, eased 0.1% to $1,887/oz.  Silver held steady at $22.7. Bitcoin BTC/USD fell 2.9% $25,940.

Staff writer Piero Cingari updated this report midday Friday. 

Photo via Shutterstock.

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