On Friday, stocks mostly went down in the early parts of the session with further decreases observed as the day progressed. The major financial indicators, such as the Nasdaq and the S&P 500, have been significantly impacted, showing consistent declines for three consecutive days.
Despite varying highs, the major averages continue to remain on a decreasing trend. The Nasdaq has recently gone down by 135.86 points or 0.8 percent, bringing it to 15,992.67. The S&P 500 had reduced by 30.91 points or 0.6 percent to 5,119.57, and the Dow also went down by 193.08 points or 0.5 percent to 38,712.58.
The recent uncertainty in Wall Street is partly due to the concern about interest rates' outlook ahead of the Federal Reserve’s monetary policy meeting to be held next week. While it is widely anticipated for the Federal Reserve to maintain the current interest rates, traders are keenly observing any clues in the accompanying statement about future interest rates.
Recent inflation readings, which indicate higher than expected rates, have effectively curbed the optimism about the Federal Reserve implementing its first rate cut in June. According to the CME Group's FedWatch Tool, the probability of the Federal Reserve maintaining rates in June has risen from an earlier estimation of 25 percent to now 41.6 percent.
A report from the Labor Department indicates that import prices in the U.S. for February increased in accordance with economist predictions. Import prices rose by 0.3 percent in February after it climbed by 0.8 percent in January. This increase aligns perfectly with expectations. There was also an increase in export prices by 0.8 percent in February after an upward revision of 0.9 percent growth in January.
The Federal Reserve's report has shown a slight increase in U.S. industrial production in February, as there have been recoveries in manufacturing and mining output from weather-related declines experienced in January.
An unexpected slight drop in U.S. consumer sentiment in March was also revealed in preliminary data from the University of Michigan. Expectations for inflation over the course of a year and over the long run remained steady from the previous month at 3.0 percent and 2.9 percent, respectively.
A New York Federal Reserve Bank's report showed that New York manufacturing activity contracted at a much faster rate in March.
Despite the broader markets' weakness, most of the major sectors reported only modest changes on the day. However, substantial weakness has been noted in software stocks, with the Dow Jones U.S. Software Index plunging by 2.8 percent. Adobe has largely contributed to this decrease, dropping by 14.3 percent after reporting better than expected fiscal first quarter results but providing disappointing revenue guidance for the current quarter.
Retail stocks also show significant weakness during the day, while some level of resilience is noted among housing stocks.
Stock markets across the Asia-Pacific region mostly decreased on Friday, with the Hang Seng Index in Hong Kong falling by 1.4 percent and Japan's Nikkei 225 Index diminishing by 0.3 percent. China's Shanghai Composite Index, however, went against the trend and increased by 0.5 percent.
The major European markets showed a dismal performance on the day. The FTSE 100 Index in the U.K. dipped by 0.2 percent, while both the German DAX Index and the French CAC 40 Index closed the day relatively unchanged.
In the bond market, treasuries showed modest weakness, thus carrying forward the week's downward trend. As a result, the yield on the benchmark ten-year note, which moves opposite to its price, rose by 1.0 basis point to 4.308 percent.
