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Various sectors suffered in the market selloff on Friday, with technology, consumer discretionary, materials, and energy stocks among the most impacted. The Technology Select Sector SPDR (XLK) fell by 1.9%, while the Consumer Discretionary Select Sector SPDR (XLY) dropped by 1.7%. The Materials Select Sector SPDR (XLB) and the Energy Select Sector SPDR (XLE (NYSE:XLE)) also saw declines of 1.1% and 1.5%, respectively.
Investors’ apprehension was evident in the CBOE Volatility Index (VIX), which rose by 7.57% to reach 13.79, reflecting the increased market volatility.
The concern over inflation remains a significant issue for investors as it continues to be higher than the Federal Reserve’s target of 2%, despite a sharp fall over the past year. The robustness of the economy further complicates this situation as it presents a challenge for the Federal Reserve to combat high inflation.
Despite these worries, there is optimism that the Federal Reserve will maintain its current interest rates in its meeting next week. However, pressure on stocks continued to build on Friday as Treasury yields increased again. The 10-year Treasury yield rose by 3.2 basis points to 4.321%.
Tech stocks were particularly hit hard, with shares of Adobe Inc. (NASDAQ:NASDAQ:ADBE) falling by 4.2%, despite the company exceeding earnings and revenue expectations for the third quarter of fiscal 2023. Adobe reported non-GAAP earnings of $4.09 per share, surpassing the Zacks Consensus Estimate by 3.02%. Despite the decline, Adobe maintains a Zacks Rank #2 (Buy).
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