As the trading session progressed on Friday, the tech-heavy Nasdaq and the S&P 500 experienced declines, while the more narrowly-focused Dow Jones Industrial Average maintained positive territory in the afternoon.
Currently, the Dow has risen by 179.89 points, or 0.5%, to 38,291.37. In contrast, the S&P 500 has fallen by 21.97 points, or 0.4%, to 5,213.51, and the Nasdaq has dropped 206.82 points, or 1.2%, to 16,530.26.
The Nasdaq continues to retract from the record closing high established on Tuesday, driven in part by tech stocks such as Nvidia (NVDA) declining. Computer hardware stocks have significantly moved downward, as evidenced by the NYSE Arca Computer Hardware Index falling 4.1% after hitting a record closing high on Thursday.
Dell Technologies (DELL) is notably leading the sector lower, plunging 19.0% following better-than-expected first-quarter results but predicting a roughly 150 basis point contraction in its gross margin for 2025.
Substantial weakness is also apparent in the semiconductor sector, highlighted by the 2.6% decline in the Philadelphia Semiconductor Index. Marvell Technology (MRVL) is experiencing a significant loss after projecting fiscal second-quarter earnings slightly below analyst expectations.
Software stocks are witnessing considerable downturns, while retail stocks are among the worst performers outside the tech sector.
However, telecom stocks, along with utilities and energy stocks, have shown robust upward movements.
Early strength on Wall Street was bolstered by a much-anticipated Commerce Department report indicating that consumer prices in the U.S. increased in April, aligning with economist predictions, while core consumer prices edged up slightly less than expected.
The Commerce Department disclosed that its personal consumption expenditures (PCE) price index rose by 0.3% for the third consecutive month in April, meeting economist forecasts. Conversely, the core PCE price index, excluding food and energy prices, inched up by 0.2% in April following a 0.3% increase in March, below the 0.3% economists had anticipated.
The annual growth rates for both the PCE price index and the core PCE price index remained unchanged from the prior month at 2.7% and 2.8%, respectively, consistent with expectations. These inflation readings, preferred by the Federal Reserve, were included in the Commerce Department's report on personal income and spending.
Real personal spending, which excludes price changes, saw a slight decline of 0.1% in April after a 0.4% increase in March, according to the Commerce Department.
Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, remarked, "We are in a be-careful-what-you-wish-for moment. If slowing consumer spending leads to lower inflation and the Fed can cut rates gradually, it will benefit markets. However, if consumer spending—and the economy—slows too quickly, corporate profits and stock prices will decline faster than the Fed can reduce rates, making caution necessary at this point."
In overseas trading, Asia-Pacific stock markets presented mixed results on Friday. Japan's Nikkei 225 Index climbed 1.1%, while Hong Kong's Hang Seng Index fell 0.8%.
Meanwhile, major European markets all advanced. The U.K.'s FTSE 100 Index rose 0.5%, the French CAC 40 Index edged up 0.2%, and the German DAX Index closed marginally above the unchanged line.
In the bond market, treasuries extended their rebound in response to the latest inflation data. As a result, the yield on the benchmark ten-year note, which moves inversely to its price, decreased by 4.4 basis points to 4.510%.
