Yahoo Finance

Stock market news live updates: Stocks mixed, Nasdaq recovers losses after tech selloff but posts weekly loss

Emily McCormick · Reporter
9 min read

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Stocks ended mixed on Friday, with the Dow and S&P 500 declining while the Nasdaq recovered some losses from Thursday's session.

The S&P 500 ended Friday's session a tick below the flat line and logged its first weekly loss in three weeks. The Dow traded lower by more than 200 points, weighed down by Visa and Nike, the latter of which fell after reporting disappointing quarterly sales results. A day earlier, the Nasdaq slid by 3% for its worst session in three weeks as bond yields resurged. On Friday, the 10-year Treasury yield hovered little changed after reaching its highest level since January 2020 this week, as concerns over inflation reignited.

Traders have been considering whether a rapid rise in inflation later this year might take place and crimp the economic recovery, or spur a near-term shift in the Federal Reserve's ultra-accommodative monetary policy. Federal Reserve Chair Jerome Powell attempted to quell markets' fears over a near-term monetary policy move earlier this week, but the risks remain on the table in the eyes of many investors.

"Chairman Powell was pretty adamant, as he had been in front of Congress as well, that he was not really inclined to do anything preemptive about inflation, but react to it if inflation becomes a problem and if we’re at full employment. We’re a long way off from that, but the bond market now is getting nervous that we could see the inflation becoming a problem before the Fed does anything about it. And that’s the little bit of a freak out that we had been seeing in bonds, and that continued [Thursday]," Steve Sosnick, Interactive Brokers chief strategist, told Yahoo Finance.

For technology and growth stocks, the rise in rates, as traders price in both expectations of higher economic growth and higher inflation, has catalyzed an especially jarring rout. The tech-heavy Nasdaq has fallen 0.6% for March to date and is holding onto a year-to-date gain of just 1.8%, after surging by 44% in 2020.

“People didn’t really seem to mind that valuations were going up and up and up throughout much of the past 12 months. And that was largely because there was the money flowing in, there were steady earnings et cetera et cetera. And if you could divide steady earnings and steady cash flow essentially by zero, you could put an almost infinite valuation on those future flows," Sosnick said.

"The problem is, if you start to discount those by ever-higher numbers," – or as interest rates rise – "even though they’re still low by historical standards, that doesn’t give you much room if you’re priced to perfection," he added. "It also means that in markets that have really outstripped their longer-term trends or their longer-term moving averages, there’s some room to go on the downside if the psychology remains as it is."

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