Wall Street Retreats, Set for Losing Week/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks declined Friday as tech-sector losses dragged Wall Street toward its first weekly drop in a month. Big-name tech companies weighed down the S&P 500 despite strong earnings from many firms. Investors remain anxious amid inflation concerns, weak consumer sentiment, and missing economic data due to the government shutdown.
Wall Street Weekly Wrap Quick Looks
- S&P 500 down 0.7%, Nasdaq falls 1%, Dow slips 130 points.
- Big tech stocks like Nvidia and Broadcom led losses.
- Wall Street is on pace for first weekly decline in four weeks.
- Earnings season remains strong, with 90% of S&P 500 companies reporting.
- Block dropped nearly 10% after missing expectations.
- Expedia soared 16.6% following a strong earnings beat.
- Government shutdown delays key economic data, including jobs report.
- Consumer sentiment dropped, and inflation expectations rose slightly.
- Treasury yields held steady; global markets also slid.
Wall Street Retreats, Set for Losing Week
Deep Look
NEW YORK — Wall Street stocks slipped Friday morning, signaling the first weekly loss for U.S. markets in a month as big-name tech companies dragged the broader indexes lower.
The S&P 500 declined 0.7%, the Nasdaq composite fell 1%, and the Dow Jones Industrial Average dropped 130 points, or 0.3%, by 10:25 a.m. Eastern time.
The drop put major indexes on track to close the week in negative territory for the first time in four weeks, as investors reacted to disappointing earnings from some major names, weakening consumer sentiment, and continued uncertainty due to the ongoing U.S. government shutdown.
Tech Drags Down the Market
Technology stocks were the primary weight on Friday’s market performance. Despite the fact that more stocks rose than fell within the S&P 500, outsized declines in high-valuation tech names pulled the index downward.
- Nvidia dropped 2.6%.
- Broadcom lost 1.8%.
- Other mega-cap tech names also traded lower, amplifying the losses in the tech-heavy Nasdaq.
These companies hold significant influence on index movements due to their large market capitalizations.
Earnings Reports: A Mixed Bag
Investors continued to digest a flurry of corporate earnings reports, which have largely been positive overall. Over 90% of S&P 500 companies have reported their quarterly results, and according to FactSet data, most have beaten analyst expectations — especially within the tech sector.
However, some notable companies disappointed:
- Block Inc., the parent company of Square and Cash App, plummeted 9.8% after missing earnings forecasts.
- In contrast, Peloton gained 6.1% after exceeding estimates.
- Expedia Group was Friday’s standout, soaring 16.6% after easily topping earnings expectations.
While the earnings season has mostly impressed, investors are scrutinizing profit reports and forward-looking guidance more closely amid broader economic uncertainty.
Data Blackout from Government Shutdown
A key reason for the market’s increased sensitivity to earnings data is the continued government shutdown, which has delayed the release of essential economic reports.
- October’s U.S. jobs report was not released, adding to the vacuum after September’s data was also withheld.
- The shutdown is now the longest on record, raising concerns about its broader economic impact.
Economists and traders are especially worried about the missing employment data, as recent signs pointed to a cooling labor market even before the shutdown.
Without reliable government data, Wall Street is turning to private sources and consumer surveys to assess the health of the economy.
Consumer Sentiment Falls, Inflation Fears Linger
Friday brought the release of the University of Michigan’s monthly consumer sentiment index, which revealed a sharp drop in consumer confidence compared to last month — a surprising decline that economists had not anticipated.
The same survey also noted a slight increase in inflation expectations, adding further pressure to a market already wary of rising prices.
Because of the data delays, analysts are also missing updates on consumer price index (CPI) and producer price index (PPI) reports — both of which are closely monitored for inflation trends.
Inflation and the Trade War Loom Large
Even without recent CPI data, inflation remains a key concern for Wall Street. Prices have remained elevated throughout the year, and analysts fear that ongoing U.S.-China trade tensions could intensify inflation pressures.
Although recent talks between President Donald Trump and Chinese President Xi Jinping appear to have de-escalated the trade war, the long-term economic effects remain uncertain.
Bond Market Holds Steady
In the bond market, Treasury yields showed little change:
- The 10-year Treasury yield held at 4.09%, unchanged from Thursday.
- The 2-year yield dipped slightly to 3.55%, down from 3.56%.
The stability suggests investors are waiting for more clarity on economic trends before making major moves in fixed-income markets.
Global Markets Also Under Pressure
Markets overseas followed Wall Street’s cautious tone:
- European indexes fell across the board amid global growth worries.
- Asian markets closed lower, led by concerns in China.
China’s trade data added to the gloom:
- Exports fell 1.1% in October.
- Shipments to the U.S. plunged 25% year-over-year, reflecting ongoing disruptions from trade disputes.
Still, some analysts believe Chinese exports could rebound if the recent agreement between the U.S. and China to cool trade tensions holds.
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