4/22/2024

Nasdaq and S&P 500 closed lower on Friday

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Key points:

  • The Nasdaq and S&P 500 indices ended Friday lower, while the Dow Jones rose.
  • The decline in Netflix shares was one of the main factors behind the decline of the S&P 500.
  • The S&P 500 and Nasdaq have fallen for 6 straight sessions, the longest streak of declines since October 2022.

The American stock market has a mixed picture. The Nasdaq and S&P 500 ended Friday lower, while the Dow Jones rose.

The Nasdaq fell under pressure from Netflix shares, which fell significantly in price. American Express shares, on the other hand, posted gains after posting strong quarterly earnings, helping keep the Dow Jones afloat. Also weighing on investor sentiment was growing doubt that the US Federal Reserve will cut interest rates anytime soon.

The Dow Jones Industrial Average rose 211.02 points, or 0.56%, to 37,986.40. The S&P 500 fell 43.89 points, or 0.88%, to 4,967.23. The Nasdaq Composite fell 319.49 points, or 2.05%, to 15,282.01.

Fed doubts and the situation in the Middle East

After a five-month rally that began in November, the stock has struggled. The rise was driven in part by expectations that the Federal Reserve would cut interest rates in the first half of the year.

However, these expectations have been shaken due to a number of factors. First, a number of economic indicators, including inflation and labor market data, were higher than expected. Secondly, geopolitical tensions in the Middle East have led to rising oil prices. In addition, Fed officials, including Chairman Jerome Powell, are now making it clear that a rate cut is unlikely in the near future.

Despite these changes, there are still expectations in the market for a rate cut. This is partly due to the lack of clear signs in the economic data that require a reduction.

However, Chicago Fed President Austan Goolsbee said “progress in reducing inflation has stalled this year,” becoming the latest Fed official to backtrack on earlier calls to cut interest rates.

Netflix shares hindered S&P 500 gains

Netflix shares fell, leading declines in the S&P 500 and Nasdaq. The drop came after the company missed analysts’ expectations for second-quarter revenue and abandoned its practice of releasing subscriber numbers.

In contrast, the Dow Jones index rose thanks to gains in American Express shares. The payments company delivered strong first-quarter results, beating earnings estimates.

The S&P 500 and Nasdaq have fallen for six straight sessions, marking the longest streak of declines for each since October 2022. The S&P 500 is now 5.46% below its record close on March 28th.

Shares of chip makers, which have risen this year on the back of artificial intelligence, also fell. The Philadelphia Semiconductor Index fell 4.12%, recording its biggest weekly percentage drop (9.23%) in nearly two years.

Paramount Global shares rose 13.4% after reports that Sony Pictures Entertainment and Apollo Global Management are considering a joint bid for the company.

Trading volume on US exchanges amounted to 11.48 billion shares, which is higher than the average for the last 20 trading days (10.99 billion).

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