S&P 500 Ends Flat as Megacap Growth Stocks Weaken
The S&P 500 closed nearly unchanged on Friday as defensive sectors and energy gains offset weakness in megacap growth stocks. Investors are now looking ahead to Federal Reserve Chair Jerome Powell’s upcoming speech for insights on the interest rate outlook. Here are the key points:
– Megacap technology-related growth stocks, including Alphabet and Tesla, dipped as investors worried about potential long-term interest rate increases. The tech-heavy Nasdaq had the largest weekly decline among major indices.
– Attention has shifted to Powell’s speech at the Jackson Hole economic symposium for clues on interest rates, as well as chip designer Nvidia’s earnings announcement.
– The S&P 500 lost a marginal 0.01%, the Nasdaq Composite fell 0.2%, and the Dow Jones Industrial Average rose 0.07%.
– Defensive sectors like consumer staples and utilities saw gains, with Walmart helping boost the Dow Jones Industrial Average. The S&P 500 energy index also rose, led by Exxon Mobil.
– The Nasdaq has experienced its deepest three-week drop since December, while the S&P 500 had its largest decline since March.
– Higher interest rates have become the catalyst for the long-overdue correction in equities. Large-cap equities, which were trading at significant premiums, are particularly affected.
In conclusion, the S&P 500 ended flat as defensive sectors and energy countered the weakness in megacap growth stocks. Investors are now eagerly awaiting Powell’s speech and Nvidia’s earnings for further guidance. The recent decline in the Nasdaq and S&P 500 can be attributed to rising interest rate expectations.
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