Major US Stock Indices Slide as Nasdaq Composite Extends Losing Streak
The major US stock indices ended last week on a low, with the Nasdaq Composite falling for the sixth consecutive session on Friday, marking its longest losing streak in over a year. This decline was exacerbated by a significant drop in Nvidia (NASDAQ: NVDA), amidst broader market challenges including geopolitical tensions and persistent inflation.
The tech-focused Nasdaq retreated 2.05% to close at 15,282.01, while the broader S&P 500 also experienced a downturn, sliding 0.88% to end at 4,967.23. This decline brought both indices to their sixth consecutive day of losses, a negative streak not observed since October 2022.
Conversely, the Dow Jones Industrial Average saw an increase, rising 211.02 points, or 0.56%, to close at 37,986.40. This rise was primarily fueled by a surge of over 6% in American Express (NYSE: AXP) following its earnings report.
Nasdaq Extends Losses, S&P 500 Posts Worst Weekly Performance Since March
On a weekly basis, the S&P 500 saw its worst weekly performance since March 2023, driven by increasing concerns over inflation and monetary policy directions. With a loss exceeding 3%, this marked the large-cap benchmark’s third consecutive negative week. Much of this downward pressure was due to poor performance in the technology sector, which was the worst-performing sector in the S&P 500 during the week. The index is currently over 5% below its 52-week high.
Key Economic Events and Earnings Reports in Focus This Week
This week, much of the market’s attention will likely be focused on major economic events including the release of the durable goods report on Wednesday, followed by the advance GDP report for the first quarter on Thursday, and the core PCE inflation report on Friday.
In addition to key economic developments, investors and analysts will also be closely scrutinizing the upcoming earnings report releases this week. On Monday, Citi strategists said they have revised their multi-variable regression analysis that combines key macroeconomic indicators with S&P 500 earnings growth. Their updated analysis indicates “a very high likelihood of a positive Q1 EPS surprise, but relatively limited guidance follow-through,” they said.
Analysts’ Take on US Stocks
Analysts from Oppenheimer, UBS, JPMorgan, and Morgan Stanley have provided their perspectives on the current market environment. Oppenheimer noted that while it’s still early to make definitive statements about the earnings season, early results show positive growth with 80% of reported companies beating expectations. UBS cautioned against exiting markets due to geopolitical risks, emphasizing that such episodes tend to have short-lived effects on the S&P 500. JPMorgan highlighted the shift away from multiple expansion and low volatility seen earlier in the year, suggesting a potential move towards more defensive trading strategies. Morgan Stanley emphasized the impact of rising yields and geopolitical uncertainty on valuations, indicating potential downside risks for multiples in the near term.
