Stocks bounced on Friday as Wall Street attempted to find its footing after a brutal week of selling but all the major averages ended the week in the negative, with the S&P 500 posting its worst week since 2020.
The Dow Jones Industrial Average rose 108 points, or 0.4%, while the S&P 500 gained 0.7% and the Nasdaq Composite jumped 1.8%.
Stocks were volatile in Friday’s trading, switching between gains and losses as investors grew increasingly worried about a potential economic slowdown.
Several key pieces of economic data fell short of forecasts this week, ranging from May retail sales to housing starts. Additionally, the Federal Reserve raised its benchmark interest rate by the most since 1994.
The S&P 500 is down 6% and could be headed for its worst weekly performance since March 2020. All 11 of its sectors are at least 15% below their recent highs.
The Dow bounced above the 30,000 mark after falling below that level on Thursday for the first time since January 2021. The 30-stock average is down 5% for the week, on track for its 11th negative week in 12. The tech-heavy Nasdaq Composite is also down about 5% for the week.
“It’s clear that there’s still some volatility and that’s a situation that’s going be with us for a while given the rising uncertainty,” said John Canavan, lead analyst at Oxford Economics. “I do think that after the extreme moves that we’ve seen over the past week, it’s sort of an exhausted market looking to a three-day weekend and just trying to find a place to settle in.”
Market volatility could be heightened Friday thanks to “quadruple witching.” This refers to the simultaneous expiration of stock index futures, single-stock futures, stock options and stock index options, which happens once a quarter. It typically leads to a surge in trading volume, making for choppy trading action as traders close out positions.
Beaten-up tech shares staged a rally. Investors have heavily sold off the growth sector as rates rise. Shares of Tesla, Amazon and Netflix rose nearly 3%. Apple, Nvidia and Microsoft added 2%. Travel stocks Airbnb, Carnival and Norwegian Cruise Line also rebounded, jumping 7% each.
The Dow moved higher on Friday, buoyed by a 5% gain from American Express. Boeing and Salesforce rose more than 3% each. Consumer discretionary, communication services and information technology jumped more than 1% but are off more than 30% from their 52-week highs. Energy continued its retreat, falling 5%.
Comments from the Federal Reserve Chairman Jerome Powell on Friday echoed the central bank’s commitment to tamping down inflation after hiking rates by 75 basis points earlier this week. The Fed is “acutely focused on returning inflation to our 2 percent objective,” he said.
The stock market’s weekly moves raised further questions as to when a recession will come, if it hasn’t already hit.
“Near-term recession has become a foregone conclusion for many investors; the only questions now are its duration and the severity of its impact on earnings,” said Chris Harvey, Wells Fargo Securities head of equity strategy said in a note Friday.