Even at the end of a disappointing week on the stock market, investors were not persuaded to buy on Friday. The warning sign of further increases in key interest rates weighed on prices, continuing the correction of the past four trading days. The Dow Jones Industrial fell by a further 0.65 percent to 33,727.43 points, resulting in a weekly loss of 1.7 percent, the weakest week for the Dow since early March.
Recent indications suggest that the US Federal Reserve Bank is likely to keep key interest rates at a higher level for a longer period of time due to high inflation. This makes shares less attractive compared to bonds, and high capital market interest rates make it more expensive for companies to refinance, weighing on their profits.
Technology stocks such as Salesforce, Cisco Systems, IBM, and Microsoft were among the biggest losers in the Dow. The tech-heavy Nasdaq 100 fell 1.00 percent, and the market-wide S&P 500 closed the week down 0.77 percent.
In terms of individual stocks, 3M initially saw gains in the index but gave up most of them during trading. The conglomerate agreed to pay up to $12.5 billion in a dispute over drinking water polluted by so-called eternity chemicals with the authorities. Virgin Galactic’s shares, on the other hand, fell by more than 18 percent as the space tourism provider announced plans to raise an additional $400 million from the sale of its common stock. CarMax shares rose by a good ten percent as the used-car dealer reported a profit for the fiscal first quarter that beat analyst estimates. Under Armour shares fell 2.5 percent after analysts at Wells Fargo dropped their buy recommendation for the sporting goods manufacturer’s shares.
In foreign exchange trading, the euro fell and was recently just below the USD 1.09 mark. US government bonds rose on the bond market, with the futures contract for ten-year bonds rising by 0.29 percent. The yield on ten-year Treasuries was 3.74 percent.
Overall, it was a dreary week for the stock market, with losses across various sectors. Investors will be closely watching the Federal Reserve’s next moves and any further indications of interest rate increases.
What were some of the specific factors that contributed to the declines in the technology sector
Despite a disappointing week on the stock market, investors remained cautious on Friday and refrained from making purchases. The prospect of higher key interest rates acted as a warning sign, causing prices to continue their downward correction over the past four trading days. The Dow Jones Industrial Average suffered another 0.65% decline to reach 33,727.43 points, resulting in a weekly loss of 1.7%. This marks the weakest week for the Dow since early March.
Recent indicators suggest that the US Federal Reserve Bank is inclined to maintain higher key interest rates due to elevated inflation. Consequently, shares are becoming less enticing compared to bonds. In addition, the high interest rates in the capital market are raising the cost of refinancing for companies, subsequently impacting their profits.
Technology stocks such as Salesforce, Cisco Systems, IBM, and Microsoft experienced significant losses in the Dow. The tech-heavy Nasdaq 100 fell by 1.00%, while the market-wide S&P 500 concluded the week with a 0.77% decline.
Among individual stocks, 3M initially saw gains in the index but relinquished most of them during trading. The conglomerate agreed to pay up to $12.5 billion to settle a dispute with authorities over drinking water contamination caused by persistent chemicals. Conversely, Virgin Galactic’s shares plummeted by over 18% as the space tourism provider announced plans to raise an additional $400 million through the sale of its common stock. On the other hand, CarMax witnessed a substantial 10% increase in its shares as the used-car dealer reported first-quarter profits that surpassed analyst expectations. Under Armour shares, however, fell by 2.5% after Wells Fargo analysts rescinded their buy recommendation for the sporting goods manufacturer’s shares.
In foreign exchange trading, the euro suffered a decline and recently hovered just below the USD 1.09 mark. US government bonds experienced gains in the bond market, with the futures contract for ten-year bonds rising by 0.29%. The yield on ten-year Treasuries stood at 3.74%.
Overall, it was a grim week for the stock market, with losses seen across various sectors. Investors will be closely monitoring the actions of the Federal Reserve and any further indications of potential interest rate hikes.
It’s disheartening to see the Dow Jones Industrial falling, but it’s not surprising given the cautiousness of investors amidst the current rise in interest rates. This is a crucial reminder of the interconnectedness between economic factors and market fluctuations.