Tech gains offset losses in the health care sector
Stocks drifted mostly lower on Wall Street Friday as investors braced for high-level talks between the United States and Iran, while oil prices eased following a fragile ceasefire agreement between the two countries.
The S&P 500 fell 0.1% in afternoon trading, putting it on track for a weekly loss. The Dow Jones Industrial Average dropped 271 points, or 0.6%, as of 3:21 pm Eastern time. The Nasdaq composite bucked the trend, rising 0.4%.
Markets remain volatile
Trading on Wall Street remained choppy, with most companies in the benchmark S&P 500 losing ground. Health-care stocks led the decline, with Eli Lilly and Co. falling 1.8% and Johnson & Johnson sliding 1.3%. High-valuation technology stocks helped offset broader losses, as Nvidia rose 3% and Broadcom climbed 5.3%.
Markets in Asia gained ground, while European markets were mixed.
Despite Friday’s dip, major indexes have recovered significantly over the past two weeks amid cautious optimism that tensions with Iran could be nearing a resolution, according to The Associated Press. The S&P 500 has erased most of its March losses and now sits just 2.3% below its all-time high set in January.
Days before Friday’s session, a fragile ceasefire took effect April 8, spurring hopes that oil tankers would be allowed to pass through the Strait of Hormuz. The Dow soared 1,325 points, or 2.85%, posting its best single day in a year. The S&P 500 gained 2.51%, and the Nasdaq surged 2.8%. Yet the relief was short-lived. Doubts about the durability of the ceasefire arose just hours after the announcement as a round of intense Israeli strikes on Lebanon killed and injured hundreds, prompting Iran to again close the Strait.
Oil prices ease on ceasefire hopes
Oil prices, which have driven many of the stock market’s recent swings, eased Friday. Brent crude, the international benchmark, fell 0.8% to $95.20 per barrel for June delivery. US crude for May delivery dropped 1.3% to $96.57 per barrel.
Since the conflict began in late February, Brent crude has surged from roughly $70 per barrel to more than $119 at its peak, as shipping through the vital Strait of Hormuz largely stalled.
Inflation and the Fed
The US government reported the biggest spike in inflation in four years in March, driven largely by the sharpest monthly jump in gas prices in six decades, though the increase fell just short of economists’ expectations. The yield on the 10-year Treasury rose to 4.31% from 4.29% late Thursday.
Consumer sentiment fell 10.7% in April, according to a University of Michigan survey, while year-ahead inflation expectations climbed to 4.8% from 3.8 % in March.
Jamie Cox, managing partner at Harris Financial Group, cautioned in a research note that “the effects in April are now more likely to be worse” despite the milder-than-expected March figures.
The Federal Reserve, which has signalled greater caution amid concerns about persistent inflation, is widely expected to hold interest rates steady. Several Fed officials have indicated a rate hike could still be necessary if inflation does not cool.
