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Stocks fell Friday, pressured by a spike in oil prices and rising inflation expectations, as Wall Street wraps up a volatile week.
The S&P 500 declined by 0.50 per cent, ending at 4,327.78. The tech-heavy Nasdaq Composite lost 1.23 per cent, landing at 13,407.23. The Dow Jones Industrial Average was the outlier, rising by 0.12 per cent, or 39.15 points, to close at 33,670.29.
On a weekly basis, the S&P 500 and Dow notched gains. The S&P 500 climbed 0.45 per cent to mark its second positive week, while the Dow advanced 0.79 per cent. The Nasdaq was down 0.18 per cent.
Stocks came off their session highs after consumer sentiment data was released earlier Friday. According to the University of Michigan’s closely watched survey, preliminary consumer sentiment data slumped in October while inflation expectations spiked.
A slew of largely positive reports from major financial firms on Friday had kicked off the third-quarter earnings season. Shares of JPMorgan Chase added 1.5 per cent and Wells Fargo rose just above 3 per cent, while Citigroup ended the day 0.2 per cent lower. BlackRock’s shares fell 1.3 per cent.
UnitedHealth Group, which has the highest price per share of any Dow stock, gained 2.6 per cent on earnings.
The S&P 500 hit its low of Friday’s trading session as oil prices spiked on fears that the Israel-Hamas war could escalate geopolitical tensions in the Middle East. U.S. West Texas Intermediate crude futures and international benchmark Brent crude futures each settled more than 5 per cent higher, posting their best day since April 3.
December gold futures closed 3.11 per cent higher on Friday, marking the strongest single-day gain since December 2022, and also surpassing both their 50- and 200-day moving averages for the first time since September 20th. This performance contributed to a weekly gain of 5.22 per cent, the largest since mid-March, leaving gold up 6.31 per cent for the year, while VanEck Gold Miners ETF and VanEck Junior Gold Miners ETF also saw substantial increases of 4.36 per cent and 5.12 per cent, respectively, on Friday.
Investors also kept an eye on Treasury yields. The yield on the 10-year Treasury was down by roughly 9 basis points at 4.62 per cent. The 2-year Treasury yield was about 1 basis point lower at 5.05 per cent. Yields and prices have an inverted relationship.
Investors remain slightly cautious about equities, but are optimistic that stocks could rally in the fourth quarter if yields climb back down and rates move lower.
Shifting to China, the iron ore imports dropped by 4.9 per cent in September compared to August due to decreasing steel margins, increased domestic supply, and a majority of Chinese steel mills operating at a loss, with further declines expected in October due to reduced demand.
Futures
The SPI futures are pointing to a 0.4 per cent fall.
Currency
One Australian dollar at 7:30 AM was buying 63.04 US cents.
Commodities
Gold gained 3.11 per cent. Silver jumped 4.26 per cent. Copper lost 0.56 per cent. Oil gained 5.77 per cent.
Figures around the globe
European markets closed lower. London’s FTSE fell 0.59 per cent, Frankfurt lost 1.55 per cent, and Paris closed 1.42 per cent lower.
Turning to Asian markets, Tokyo’s Nikkei fell 0.55 per cent, Hong Kong’s Hang Seng dropped 2.33 per cent while China’s Shanghai Composite closed 0.64 per cent lower.
On Friday, the Australian share market closed 0.56 per cent lower at 7,051.03
Ex-dividends
Cadence Capital (ASX:CDM) is paying 3 cents fully franked
CDO Opportunity Fund (ASX:CDO) is paying 6.5 cents fully franked
Dividends payable
Carsales.com Ltd (ASX:CAR)
CTI Logistics Ltd (ASX:CLX)
Peet Ltd (ASX:PPC)
Saunders International Ltd (ASX:SND)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
