Stocks plummeted on Friday as the S&P 500 forged the path to its third-down week in a row due to rising bond yields and busy earnings.
The Dow Jones Industrial Average declined 631 points or 1.8%. The S&P 500 was down 1.8%, and the Nasdaq Composite was 1.5% lower.
Following the disappointing quarterly results from several companies, the market tumbled dramatically. For instance, HCA Healthcare plunged 18% claiming the title of the worst-performing stock in the S&P 500. The price drop followed the company’s weak full-year earnings and revenue guidance.
Verizon shares dropped 6% after the wireless network operator reported a loss of 36,000 monthly phone subscribers in Q1. Gap shares fell 13% after the company announced the CEO of its Old Navy division, Nancy Green is leaving the firm this week.
Friday’s dramatic price swings followed Federal Reserve chair Jerome Powell’s speech. The dow closed 300 points lower, while the S&P 500 plummeted by 1.5%. The tech-heavy Nasdaq Composite slid 2%.
“Stagflation concerns resurface on the back of real-time signs of a tight labor market and waning business sentiment, coupled with another bounce in 10-year Treasury yields — and all peppered with a deluge of earnings releases,” Chris Hussey, a managing director at Goldman Sachs, said in a note.
“Despite April posting the strongest average price increase since World War II, and second-highest frequency of advance, the prospects of more aggressive rate tightening by the Federal Reserve in response to an inflation rate not seen since the early 1980s continues to weigh on stock prices and investor nerves,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC.
Powell said during an International Monetary Fund panel moderated by CNBC’s Sara Eisen that taming inflation is “absolutely essential” and a 50-basis-point hike is on the table for May.
“Central bank hawkishness and bond yields back up are again moving markets,” Ross Mayfield, investment strategy analyst at Baird, told CNBC. “Nothing especially new but a fresh reminder of the monumental shift underway on the policy front. Powell did note there may be benefit to front-loading hikes and being aggressive early, this sets them up for the potential to cut later on if the economy stumbles.”