U.S. stocks ended lower on Friday after hitting new highs following Donald Trump’s return to the White House earlier in the week while investors looked forward to the Federal Reserve’s policy meeting. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) slid 0.3% or 140. 82 points, to finish at 44,424.25.
The S&P 500 declined 0.3% or 17.47 points, to close at 6,101.24 points. Technology, consumer discretionary and energy stocks were the worst performers.
The Technology Select Sector SPDR (XLK) and the Energy Select Sector SPDR (XLE) each fell 1%, while the Consumer Discretionary Select Sector SPDR (XLY) declined 0.6%. Five of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq gave up 0.5% or 30 points to end at 19,954.30 points.
The fear-gauge CBOE Volatility Index (VIX) was down 1.13% to 14.85. Advancers outnumbered decliners on the NYSE by a 1.45-to-1 ratio. On the Nasdaq, a 1.05-to-1 ratio favored advancing issues. A total of 14.02 billion shares were traded on Friday, lower than the last 20-session average of 14.90 billion.
Tech Stocks Take a Hit
Tech stocks were the biggest drag on the broader market, with mega-caps suffering the most on Friday. Also, artificial intelligence stocks declined sharply on Friday.
Shares of NVIDIA Corporation (NVDA) declined 3.1%, while Amazon.com, Inc. (AMZN) and Apple, Inc. (AAPL) lost 0.3% and 0.2%, respectively. NVIDIA has a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Despite Friday’s decline, investor sentiment has been positive on optimism toward Trump’s pro-business policies, which saw stocks rebounding from their earlier lows. Earlier, Trump had threatened several countries that he would impose higher tariffs on his return to the White House, raising concerns among investors.
However, investors were a lot relieved as they now believe that those were only threats as Trump is yet to take any such action.
Investors Await Federal Reserve’s Meeting
It was relatively a light week for economic data but investors are now awaiting the outcome of the Federal Reserve’s two-day policy meeting that begins on Tuesday. A rate cut is almost unlikely but investors would be looking forward to the outcome to get a clearer picture of the central bank’s future rate path.
The fourth-quarter earnings season has also begun and investors will be looking forward to a slew of industry bellwethers who are scheduled to report quarterly results this week.
Economic Data
In economic data released on Friday, housing market data came in hotter than expected. National Association of Realtors said on Friday that existing home sales jumped 2.2% month over month in December to a seasonally adjusted annual rate of 4.24 million units, hitting a 10-month high in December.
The University of Michigan’s Consumer Sentiment Index came up with a final reading of 71.1 for January, declining 2.9 points or 3.9% from December’s final reading of 74. January’s reading also missed economists’ forecast of 73.2.
Weekly Roundup
Despite Friday’s decline, it was an impressive week for Wall Street, with all three indexes closing higher for the week. The Dow ended the week 2.2% higher, while the S&P 500 and Nasdaq each gained 1.7% for the week.
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