It was another bearish trading week for U.S. stocks as the major indexes have returned to losing ways as they are now on their third week of consecutive decline.
The New York Stock Exchange (NYSE) All Share Index (ASI) lost 6.62% for the week, its largest weekly decline it has seen for the year so far. The NYSE is now on a three-week losing streak. It opened, trading at 15,096.70 basis points and it closed the week trading at 14,097.00 basis points. Of the five trading sessions seen during the week, the NYSE posted gains for only one of the trading sessions of week, with the bears dominating the market.
The NASDAQ also ended bearish as it posted losses of 4.78% during the week under consideration. It started at a basis point of 10,986.84 and ended the week at 10,798.35 basis points. The week in question saw an increase in the volume of transactions against the previous week by 164.15% as the market recorded a volume of 2.80 billion.
The Dow Jones and the S&P 500 also posted losses of 4.80% and 5.79% respectively. Both are on a three-week losing streak as well.
What’s moving the market?
US stocks suffered their biggest weekly percentage decline in two years as investors wrestled with the growing likelihood of a recession while global central banks tried to stamp out inflation.
Stubbornly high inflation rates have caused panic in the minds of investors this year because of the U.S. Federal Reserve, along with most major central banks, beginning to pivot from easy monetary policies to tightening measures which will slow the economy, possibly causing a recession and potentially dent corporate earnings.
Several key pieces of economic data missed forecasts during the week, ranging from retail sales to housing starts and the Federal Reserve raised its benchmark interest rate by 75 basis points, the most since 1994. The Dow Jones again closed under the 30,000 BP after dipping below that level on Thursday for the first time since January 2021. The Dow closed down 4.8% for the week, its 11th losing week out of 12, while the S&P 500 slumped 5.8% and the tech-heavy Nasdaq also fell 4.8%. Each of the three major Wall Street indexes fell the third week in a row.
The Federal Reserve on Wednesday implemented its largest interest rate hike since 1994, taking the threat of inflation seriously by intensifying its campaign against surging prices. According to Fed Chair, Jerome Powell, who is just beginning to show his aggressive side, explained that another 75 basis point hike – or a 50 bps move – is also in the cards for the meeting in July. Stocks initially climbed into the close in somewhat of a relief rally, but a bloodbath rocked Wall Street in the following session.
Powell explained, “We don’t seek to put people out of work. Of course, we never think too many people are working and fewer people need to have jobs, but we also think that you really cannot have the kind of labor market we want without price stability. It’s not going to be easy, and it may well depend, of course, on events that are not under our control.”
Over the past couple of months, Elon Musk has gone back and forth on an offer to buy Twitter (TWTR) for $44B. He most recently suggested that he could walk away from the deal due to being willfully misled on fake accounts (or an inability to secure financing), but in the meantime, he’s on the hook for going through with the transaction. Twitter employees have also expressed uncertainty and mixed reactions to the takeover as a leaked slack conversation was the talk of the social media platform.
Amazon announced that it will begin Prime Air drone deliveries later this year as it attempts to get the project off the ground. The service will initially be available in Lockeford, California, which is about 40 miles south of Sacramento and will use feedback from the service to improve its operations. To fly delivery drones in the U.S., companies have to be approved by the FAA, and the retail behemoth is one of only three firms that has received Part 135 certification.
Gains were led by the communication services and consumer discretionary sectors, which rose 1.31% and up 1.22%, respectively, on the session. The two have been among the worst performing of the 11 major groups on the year. In contrast, energy, the year’s best performing sector, fell with a 5.57% tumble and suffered its biggest weekly percentage drop since March 2020, on concerns a slowing global economy could sap demand for crude oil.
Also contributing to choppy trading was the expiration of monthly and quarterly options contracts ahead of the Juneteenth market holiday on Monday. Volume on U.S. exchanges was 17.99 billion shares, compared with the 12.42 billion session average over the last 20 trading days. Advancing issues outnumbered decliners ones on the NYSE by a 1.37-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.
Top 5 gainers
- Sidus Space Inc CI A (SIDU) 310.67%
- Comera Life Sciences Holdings Inc (CMRA) 236.36%
- Day One Biopharmaceuticals Inc (DAWN) 138.52%
- Advent Technologies Hldg Inc (ADN) 107.91%
- Optinose Inc (OPTN) 84.86%
Top 5 losers
- Tdh Holdings Inc (PETZ) -61.64%
- Senti Biosciences Inc (SNTI) -54.58%
- Eros Media World Plc (EMWP) -45.86%
- Calithera Biosci Com (CALA) -43.75%
- Ejf Acquisition Corp CI A (EJFA) -43.47%