Stocks of U.S. companies fell on Friday, pushing the Dow, S&P 500, and Nasdaq into the red for the week, as inflation fears intensified.
The Dow Jones Industrials Average lost 299.17 points, or 0.86% to close at 34,687.85. The S&P 500 shed 0.75% to 4,327.16 and the Nasdaq Composite dipped 0.8% to 14,427.24.
All three indexes posted weekly losses for the first time this month as energy stocks, once the shining lights of 2021’s stock market, fell into correction territory.
The Dow ended the week down 0.52%, with S&P dipping 0.97% and the Nasdaq Composite falling 1.87% during the same period.
Inflation fears go through the roof
A report released Friday shows inflation expectations are rising, with consumers believing prices will increase 4.8% in the next year. That’s the highest level since August 2008.
Shortly after the report emerged, the Dow gave up its gains early Friday, with losses increasing as the day unfolded and other major averages closing at the lows.
The price dips come in despite the S&P 500 and the Dow briefly touching new all-time highs. The consumer price index on Tuesday showed a 5.4% increase in June from a year ago, the fastest pace in almost 13 years.
The Dow rose more than 100 points to above 35,000 shortly after opening on Friday as stocks got off to a good start. According to data released before the bell, retail and food service sales rose 0.6% in June, a level which if held, would have been the Dow’s first close ever above 35,000.
Despite this week’s losses, the Dow Jones Industrials Average is still up 13% for the year and sits just 1.15% from an all-time high. The S&P 500 is also up 15% on the year and is 1.51% below its record level.
Also Read: AMC Stock Price Falls to Half its Record High
Energy & tech stocks are also taking a hit
Energy stocks, once the hottest part of 2021’s stock market, fell into correction territory on Friday as oil prices pulled back from their highs.
The Energy Select Sector SPDR Fund fell more than 2% on Friday, dropping 14% from its high. Despite this dip, the sector is up about 28% this year. This makes the sector the top performer of any of the 11 main industry groups.
Technology stocks have also experienced weaker performances in the market. Apple’s shares closed the week 1.4% lower after the tech giant notched a record close just days before. Netflix also fell ahead of its Q2 earnings report next week.
Despite big profit growth numbers posted by the likes of JPMorgan Chase and Bank of America, the Financial Select Sector SPDR Fund ended the week 1.5% lower.
Overall, some of America’s largest companies posted healthy earnings and revenues amid the economic recovery. Yet, the reaction in the stock market seems to have gone mute.
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