U.S. stocks on Friday fell, as geopolitical concerns took centerstage once again amid an escalating conflict between Israel and Islamist group Hamas. Wall Street’s benchmark S&P 500 (SP500) index was on track to snap two straight weeks of gains.
By late afternoon, the three major averages had climbed off their session lows. The Nasdaq Composite (COMP.IND) fell 1.28% to 13,077.01 points. Solar stocks weighed on the tech-heavy index, after SolarEdge Technologies plummeted on soft guidance. Tesla (TSLA) extended a decline from the previous session, as investors continued to digest its earnings disappointment.
The S&P (SP500) was lower by 0.67% to 4,249.48 points, while the blue-chip Dow (DJI) slipped 0.41% to 33,275.70 points. The latter was weighed down by a drop in American Express (AXP), after the credit card company saw a drop in quarterly network volume.
Of the 11 S&P sectors, eight were in negative territory, led by Energy and Consumer Discretionary. Real Estate, Consumer Staples and Health Care were the three gainers.
A relentless bond sell-off finally appeared to ease up on Friday, with Treasury yields falling. The 10-year yield once again hit a session high at 5%, but was last down 6 basis points to 4.93%. The 30-year yield (US30Y) was down 2 basis points to 5.08%, while the shorter-end more rate-sensitive 2-year yield (US2Y) was down 8 basis points to 5.09%.
See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.
WTI crude oil futures (CL1:COM) had reversed course, as the Israel-Hamas conflict stayed in the spotlight. Efforts continue to bring humanitarian aid amid intensified shelling between the parties and reports of a church in the Gaza Strip being hit. A separate announcement from the U.S. energy department on buying oil for the Strategic Petroleum Reserve also gave an earlier boost to oil prices.
At home, market participants looked ahead to the end of a busy week of quarterly results and economic data. The mood on Wall Street has been clouded by geopolitical concerns, a hotter-than-expected retail sales report, and the massive runup in Treasury yields.
“This is a pivotal earnings season,” strategist Ben Laidler said. “With U.S. stocks to end their earnings recession and profits taking over from rerated valuations as the markets driver. This help is needed more than ever.”
“With the tall wall-of-worry from the middle east and oil to inflation and bond yields. Tech is the market Godzilla, as the biggest and best-performing sector with the strongest growth as the ‘magnificent seven’ lead the earnings recovery. With their Q3 profits seen up over 30% vs -2% for the remaining ‘S&P 493’. Justifying their premium valuation and lifting the whole market,” Laidler added.