(RTTNews) – After trending higher over the past few sessions, stocks moved back to the downside during trading on Friday. The major averages all moved lower on the day, with the tech-heavy Nasdaq posting a particularly steep loss.
The major averages ended the day off their lows of the session but still in negative territory. The Nasdaq slumped 249.61 points or 1.2 percent to 21,455.55, the S&P 500 slid 41.60 points or 0.6 percent to 6,460.26 and the Dow dipped 92.02 points or 0.2 percent to 45,544.88.
With the pullback on the day, the major averages closed slightly lower for the week. The S&P 500 edged down by 0.1 percent, while the Dow and the Nasdaq both slipped by 0.2 percent.
The weakness on Wall Street may partly have reflected profit taking, as some traders looked to cash in on the recent strength in the markets.
Trading has been somewhat choppy over the past few sessions, but the S&P 500 still managed to end Thursday’s trading at a new record closing high.
Meanwhile, traders have seemingly shrugged off a typically closely watched Commerce Department report showing U.S. consumer prices increased in line with estimates in the month of July.
While the data has increased confidence the Federal Reserve will lower interest rates next month, a September rate cut may already have been priced into the markets.
CME Group’s FedWatch toll is currently indicating an 87.1 percent chance the Fed will lower rates by a quarter point at its next monetary policy meeting.
The Commerce Department said its personal consumption expenditures (PCE) price index rose by 0.2 percent in July after climbing 0.3 percent in June. The uptick matched expectations.
The annual rate of growth by the PCE price index in July came in unchanged from June at 2.6 percent, which was also in line with estimates.
Excluding food and energy prices, the core PCE price index rose by 0.3 percent in July, matching the increase seen in June as well as expectations.
The annual rate of growth by the core PCE price index ticked up to 2.9 in July from 2.8 percent in June. The slight acceleration also matched estimates.
Traders also kept an eye on developments in Washington, D.C., where a District Court Judge held a hearing on Federal Reserve Governor Lisa Cook’s request to temporarily block President Donald Trump’s attempt to remove her from her position.
The hearing ended without District Judge Jia M. Cobb issuing a ruling, leaving Cook’s fate up in the air going into the long week.
Sector News
Semiconductor stocks turned in some of the market’s worst performances on the day, dragging the Philadelphia Semiconductor Index down by 3.2 percent.
Considerable weakness was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index tumbling by 2.0 percent after ending the previous session at a record closing high.
Dell Technologies (DELL) helped lead the sector lower, plunging by 8.9 percent after reporting better than expected second quarter results but providing disappointing guidance.
On the other hand, gold stocks showed a strong move to the upside along with the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 3.3 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan’s Nikkei 225 Index dipped by 0.3 percent, while China’s Shanghai Composite Index rose by 0.4 percent.
Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index slid by 0.8 percent, the German DAX Index declined by 0.6 percent and the U.K.’s FTSE 100 Index fell by 0.3 percent.
In the bond market, treasuries gave back ground after trending higher over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 4.227 percent.
Looking Ahead
Following the long Labor Day weekend, next week’s trading may be impacted by reaction to the closely watched monthly jobs report along with reports on manufacturing and service sector activity.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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