On Friday, technology stocks faced a significant downturn, which led the Nasdaq to experience a considerable decline, continuing its recent downward trend. The S&P 500 also encountered further declines, while the narrower Dow managed to resist the negative trend.
The Nasdaq sharply fell by 319.49 points or 2.1 percent, closing at 15,282.01. This marked the sixth consecutive session of decline, bringing it to its lowest closing level in over two months. The S&P 500 closed lower for the sixth consecutive day, diving 43.89 points or 0.9 percent to a two-month low of 4,967.23.
However, the Dow managed to build upon the minor gain from the previous session, rising 211.02 points or 0.6 percent to settle at 37,986.40. Over the week, the tech-intensive Nasdaq plummeted by 5.5 percent and the S&P 500 descended by 3.1 percent, while the Dow made modest gains.
This steep decline in the Nasdaq is partly due to the sharp drop in shares of Netflix, which fell by 9.1 percent. This drop occurred after the streaming company reported first-quarter earnings that exceeded expectations but provided disappointing revenue guidance. Similarly, shares of Nvidia, a favorite in the AI space, also significantly declined by 10.0 percent, contributing to the overall weakness in the semiconductor sector.
Tech hardware stocks also contributed to the Nasdaq's decline, with the NYSE Arca Computer Hardware Index falling by 3.7 percent. Outside of the tech sector, retail stocks also faced pressure, pulling the Dow Jones U.S. Retail Index down by 1.5 percent.
In a positive move, the Dow benefited from a significant jump in American Express shares, which surged 6.2 percent after reporting first-quarter results that surpassed expectations. Moreover, bank stocks delivered a strong performance, which boosted the KBW Bank Index by 2.9 percent. Furthermore, interest rate-sensitive utilities stocks also saw noticeable gains as treasury yields retracted, resulting in a 1.8 percent rise in the Dow Jones Utility Average.
An increase in the price of crude oil, following Israel's retaliation strikes against Iran, led to a gain in energy stocks. Despite initial increases, the price of oil retraced after Iranian state media played down the attacks, attributing the reported explosions in Isfahan to the activation of Iran's air defense systems.
Global markets also faced turbulence. In Asia-Pacific, stock markets sharply declined on Friday, with Japan's Nikkei 225 plummeting by 2.7 percent and Hong Kong's Hang Seng falling by 1.0 percent. European markets, however, ended the day mixed, with the U.K.'s FTSE 100 slightly up by 0.2 percent, while the French CAC 40 remained flat, and the German DAX fell by 0.6 percent.
In the bond market, treasuries pulled back after an initial surge, yet remained positive, leading the yield on the benchmark ten-year note to fall by 3.2 basis points to 4.615 percent.
Going forward, investors will keep a keen eye on upcoming U.S. economic data, such as reports on new home sales, durable goods orders, and personal income and spending. Announcements from big companies like Tesla, Boeing, IBM, Caterpillar, Honeywell, Alphabet, Intel, Microsoft, Chevron, and Exxon Mobil, who are all set to release their quarterly results, are also due to make an impact.
