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

Author: Piero Cingari | May 31, 2024 01:44pm

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 (NASDAQ:TLT) rising 0.6%.

Gold, tracked by the SPDR Gold Trust (NYSE:GLD), unexpectedly fell 0.5%, and Bitcoin (CRYPTO: BTC) dropped 1.6%.

Friday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Dow Jones	38,261.57	0.4%
Russell 2000	2,052.98	-0.1%
S&P 500	5,212.90	-0.4%
Nasdaq 100	18,267.38	-1.5%

Updated at 1:15 p.m. ET

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust (NYSE:SPY) was 0.4% lower to $520.54
The SPDR Dow Jones Industrial Average (NYSE: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 (NYSE:XLRE) outperformed, up by 1.6%, while the Technology Select Sector SPDR Fund (NYSE:XLK) lagged, down 1.5%.
Industry-wise, the SPDR S&P Oil & Gas Exploration & Production ETF (NYSE:XOP), outperformed, up 1.6%.

Friday’s Stock Movers

Caesars Entertainment Inc. (NYSE:CZR) rose over 10% after rumors that Carl Icahn invested in the casino company.
The Gap Inc. (NYSE:GPS) rose 26%, after sharply beating both earnings and revenue estimates last quarter.
MongoDB Inc. (NASDAQ: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. (NASDAQ:COST) down 2.5%, Dell Technologies Inc. (NYSE:DELL) down 20%, Marvell Technology Inc. (NASDAQ:MRVL) down 11%, Veeva Systems Inc. (NYSE:VEEV) down 11%, NetApp Inc. (NASDAQ:NTAP) up 0.6%, Zscaler Inc. (NASDAQ:ZS) up 7%, Ulta Beauty Inc. (NASDAQ:ULTA) up 0.9%, The Cooper Companies Inc. (NASDAQ:COO) up 3.7%, and SentinelOne Inc. (NYSE:S) down 12%.