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U.S. stocks were mixed midsession Friday after giving back some opening gains when a consumer-sentiment survey showed a jump in inflation expectations, while rising crude-oil prices and Middle East geopolitical tensions weighed on the technology-heavy Nasdaq.
How are stocks trading?
-
The S&P 500
SPX
shed 17 points, or 0.4%, to 4,332. -
The Dow Jones Industrial Average
DJIA
rose by 23 points, or 0.1%, to 33,651 after rising more than 200 points earlier. -
The Nasdaq Composite
COMP
was down 134 points, or 1%, at 13,439.
On Thursday, the S&P 500 slipped 0.6% to finish at 4,349.61, while the Dow Jones Industrial Average dropped 173.73 points, or 0.5% to 33,631.14. The Nasdaq Composite fell 0.6% to 13,574.22. The losses broke a four-day winning streak for those indexes.
What’s driving markets?
U.S. stocks slipped to session lows as the Dow erased gains following the release of data showing a jump in consumers’ inflation expectations, adding to an already risk-off mood in markets driven by a surge in prices of oil, while Treasury bond prices and gold also climbed, driven by rising geopolitical tensions.
“It’s a war trade,” said Jay Hatfield, CEO and portfolio manager at Infrastructure Capital Advisors, during a phone interview with MarketWatch. “Investors are selling tech, buying energy, buying bonds and buying gold.”
He also pointed to the release of Friday’s University of Michigan consumer sentiment gauge as the turning point for markets Friday. The survey data showed one-year inflation expectations rising to 3.8%, the highest level since May.
Aside from the inflation data and a batch of corporate earnings reports, the main news impacting markets was Israel’s military ordering more than 1 million people to leave Gaza, raising fears a ground offensive could be under way soon, escalating tensions in the Middle East.
Crude-oil prices surged on the news, rising more than 4%, in U.S.-traded markets, while Treasury yields dropped. The U.S. tightening sanctions on Russian crude sales also helped boost oil prices.
Rising oil prices and falling Treasury yields helped explain much of the action in stocks, as the S&P 500 energy sector took the lead, while tech stocks retreated and interest-rate sensitive sectors like utilities outperformed.
“Normally when oil is going up, tech stocks go down,” Hatfield said. “They have been the safe haven when interest rates are rising, but now that rates are dropping, the tech stocks are down slightly.”
Selling in tech shares heaped pressure on the market, since large tech stocks now exert an outsize influence on both the Nasdaq and the S&P 500.
Ahead of the open, earnings had been front and center for investors as the third-quarter reporting season swung into gear with results from JPMorgan Chase & Co.
JPM,
which reported stronger-than-expected third-quarter profit thanks to higher net interest income and lower credit costs. Shares of Wells Fargo & Co.
WFC,
also rose after its third-quarter earnings also beat forecasts by a comfortable margin.
JPMorgan Chief Executive Jamie Dimon said the bank delivered “solid” results amid a tough macroeconomic backdrop now complicated by another war. But he also delivered some more ominous commentary about markets and the economy.
“This may be the most dangerous time the world has seen in decades,” he said.
Citigroup Inc.
C,
shares climbed after the bank said its third-quarter profit edged up 2% to $3.546 billion. Of the major financial institutions reporting on Friday, only BlackRock Inc.
BLK,
shares were lower after the firm didn’t hit Wall Street’s target for sales.
Strong performance among Dow stocks like JPMorgan, Citi and UnitedHealth Group Inc.
UNH,
which also reported strong earnings, helped push the blue-chip average into the lead on Friday, a position it held even as stocks touched session lows.
Investors are expected to see a fourth-straight quarter of earnings declines overall for the S&P 500 index companies, with third-quarter per-share profit collectively expected to decline 0.3% compared with the same period a year prior, according to FactSet.
So-called haven assets like gold and Treasury bonds also rallied.
The yield for the 10-year Treasury note
BX:TMUBMUSD10Y
was down 6 basis points at 4.643%, and that of the 2-year
BX:TMUBMUSD02Y
was down 3 basis points to 5.037%. Gold also rose sharply on Friday as investors sought safety in the yellow metal. December gold contract
GCZ23,
climbed by $40.20, or 2.1%, to $1,923.20 an ounce on Comex.
Companies in focus
-
Novo Nordisk
NVO,
+2.20%
saw shares rally Friday after it boosted its full-year 2023 profit and sales outlook, reflecting heightened expectations for Ozempic and Wegovy sales. -
Dollar General Corp. shares
DG,
+9.98%
rallied after the dollar-store chain said that Todd Vasos was returning as chief executive after retiring less than a year ago. -
Microsoft
MSFT,
-0.97%
was steady after U.K. regulators on Friday gave Microsoft Corp. the go-ahead for the tech giant’s $68.7 billion acquisition of videogame holding company, Activision Blizzard, ending a long saga.
