U.S. stocks faced a tumultuous week, characterized by significant declines across major indices as various factors weighed on investor sentiment. The Nasdaq 100, in particular, experienced a sharp drop of over 5% throughout the week, potentially marking its most substantial decline since late October 2022. Similarly, the S&P 500 endured its sixth consecutive day of losses, marking the longest losing streak since September 2022. These declines were fueled by concerns over rising interest rates, corporate earnings reports, and geopolitical tensions, creating a challenging environment for investors.
One sector that bore the brunt of the market downturn was semiconductor stocks, as evidenced by the VanEck Semiconductor ETF (NYSE:SMH), which saw a notable 2.7% decline. This decline marked one of the most significant drops in semiconductor stocks since June 2022, reflecting broader concerns about the impact of rising interest rates and supply chain disruptions on the semiconductor industry.
Adding to the market uncertainty, Israel carried out limited retaliation against Iran overnight, targeting a location near an air base facility. Although the damage was minimal, the geopolitical tensions between the two countries added to existing concerns and contributed to market volatility.
Meanwhile, yields on shorter-dated U.S. Treasury bonds remained relatively stable around 5%, reflecting investors’ cautious outlook amid Federal Reserve Chair Jerome Powell’s firm stance against rate cuts. However, the stability in bond yields did little to alleviate concerns about the broader economic outlook.
Against this backdrop, gold prices surged to $2,400 per ounce as investors sought safe-haven assets amid escalating geopolitical tensions. Similarly, oil prices initially rose following the Israeli strike but stabilized later in the week.
In the cryptocurrency market, Bitcoin (CRYPTO: BTC) experienced a modest increase of over 1%, driven by anticipation surrounding the upcoming halving event and ongoing interest from institutional investors.
Despite the overall market downturn, there were notable stock movements throughout the week. Paramount Global (NASDAQ:PARA) surged 13% on rumors of a potential joint bid from Apollo Global Management (NYSE:APO) and Sony Group Corp. (NYSE:SONY). However, Super Micro Computer Inc. (NASDAQ:SMCI) faced an 18% decline after announcing its third-quarter earnings date without providing preliminary estimates.
Netflix, Inc. (NASDAQ:NFLX) saw a nearly 9% drop despite beating Street estimates last quarter, as investors reacted negatively to the company’s decision to cease quarterly disclosures on subscriber growth and average revenue per member.
Other companies reacting to earnings included American Express Co. (NYSE:AXP) and Fifth Third Bancorp (NASDAQ:FITB), which both posted gains, while Tesla Inc. (NASDAQ:TSLA) experienced a slight decline following the recall of thousands of Cybertrucks due to an accelerator pedal problem.
Overall, the week’s market performance underscored the challenges facing investors amid a confluence of factors, including geopolitical tensions, interest rate uncertainty, and corporate earnings reports. As market participants navigate these challenges, volatility is likely to persist in the coming weeks.