Tech Stocks Crumble As Wall Street's 5-Week Rally Ends; Bonds Offer Safe Haven As Growth Worries Reemerge: What's Driving Markets Friday?

Bears knocked on Wall Street’s door again Friday, sending large-cap tech stocks lower despite the Fed’s favorite inflation measure meeting expectations.

Both the S&P 500 and the Nasdaq 100 index are set to end a 5-week winning streak as investors grow more cautious about the latest economic developments.

In April 2024, the Personal Consumption Expenditure (PCE) price index held steady at 2.7% year-on-year, matching the previous month and forecasts. The annual core inflation rate also remained unchanged at 2.8%, in line with expectations.

However, concerns arose from a deceleration in personal spending and income, raising fears that strong consumer momentum is waning. Additionally, the Chicago PMI dropped to its lowest level since May 2020, increasing worries about an ongoing economic slowdown.

The tech-heavy Nasdaq 100 fell 1.5%, marking its third straight session of losses and its worst performance in a month. The S&P 500 was down 0.4%, the Russell 2000 edged 0.1% lower, while blue-chip stocks in the Dow Jones rose 0.3%, reflecting a shift to high-quality defensive stocks.

Treasury yields fell, boosting fixed-income assets, with the iShares 20+ Year Treasury Bond ETF TLT rising 0.6%.

Gold, tracked by the SPDR Gold Trust GLD, unexpectedly fell 0.5%, and Bitcoin BTC/USD dropped 1.6%.

Friday’s Performance In Major US Indices, ETFs

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.4% lower to $520.54
• The SPDR Dow Jones Industrial Average DIA rose 0.4% to $383.10
• The tech-heavy Invesco QQQ Trust (ARCA: QQQ) fell 1.4% to $445.43
• Sector-wise, the Real Estate  Select Sector SPDR Fund XLRE outperformed, up by 1.6%, while the Technology Select Sector SPDR Fund XLK lagged, down 1.5%.
• Industry-wise, the SPDR S&P Oil & Gas Exploration & Production ETF XOP, outperformed, up 1.6%.

Friday’s Stock Movers

• Caesars Entertainment Inc. CZR rose over 10% after rumors that Carl Icahn invested in the casino company.
• The Gap Inc. GPS rose 26%, after sharply beating both earnings and revenue estimates last quarter.
• MongoDB Inc. MDB plummeted 23%, eyeing the worst day since September 2022, after the company issued weak guidance for the upcoming quarter as well as for the fiscal-year 2025.
• Other stocks reacting to earnings were Costco Corp. COST down 2.5%, Dell Technologies Inc. DELL down 20%, Marvell Technology Inc. MRVL down 11%, Veeva Systems Inc. VEEV down 11%, NetApp Inc. NTAP up 0.6%, Zscaler Inc. ZS up 7%, Ulta Beauty Inc. ULTA up 0.9%, The Cooper Companies Inc. COO up 3.7%, and SentinelOne Inc. S down 12%.

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