Stocks ended a wild week with modest declines, extending a selloff that has dragged the S&P 500 to its longest weekly losing streak in more than a decade.
The major indexes have swung wildly in recent sessions as investors have tried to gauge the impact of the Federal Reserve’s plan to raise interest rates on theeconomy. Many investors find themselves caught between competing hopes: that rate increases will be significant enough to tame rapidly rising inflation, but not so large that they will derail economic growth.
Those worries, alongside rapidly rising yields in the government-bond markethave hit shares of technology and growth stocks especially hard as investors re-evaluate the once-highflying group.
The S&P 500 on Friday shed 23.53 points, or 0.6%, to 4123.34, capping a fifth consecutive week of losses, the longest streak since June 2011. The technology-heavy Nasdaq Composite lost 173.03 points, or 1.4%, to 12144.66. The Dow Jones Industrial Average lost 98.60 points, or 0.3%, to 32899.377, after slumping more than 1,000 points Thursday, its worst day since 2020.
Although the impact of rising rates has rippled through the stock market for much of the year, the selling has taken on fresh intensity in recent days. Stocks have recorded some of their steepest one-day drops since 2020, extending their losses from April. That has left investors grappling with an extended selloff that bears little resemblance to the historically short and severe stock-market crash of March 2020.
Adding to the pain for many investors: Stocks and bonds have recorded large, simultaneous losses. In bond markets, the yield on the benchmark 10-year US Treasury note rose to 3.124%, the highest level since November 2018. Bond yields rise as prices fall.
At times this week, people appeared to be selling everything, said Danny Kirsch, head of options at Piper Sandler. It is a “go to cash,” mentality, he said. “Nothing’s working.”
All three major indexes notched modest weekly losses, though the tech-heavy Nasdaq continued to underperform its peers. The S&P 500 and Dow shed 0.2% each for the week. The Nasdaq fell 1.5%, its fifth weekly loss of at least 1%—the longest such stretch since August 2002, according to Dow Jones Market Data.
At times in recent weeks, investors have stepped back in to pick up stocks at a discount, helping stabilize the market. But the gains so far have been short-lived, and the indexes have continued to trade near their lows of the year.
The S&P 500 has fallen 13% in 2022, the Dow is off 9.5%, and the Nasdaq has lost 22%.
“Investors, in some ways, may have forgotten what corrections felt like,” said Mike Bailey, director of research at FBB Capital Partners. “Some of them may just want out.”
Stocks soared Wednesday after the Federal Reserve raised interest rates by half a percentage point, buoyed by relief that the central bank wasn’t actively considering even larger increases in the future. That relief faded Thursday and Friday as investors reassessed the outlook for stocks, leading to a punishing selloff that caught many off guard.
Matt Rowe, executive director of global markets at Nomura, said some of his clients were dumping stocks rather than opting to put on stock hedges through the derivatives markets.
“We have seen net and gross risk reduction as opposed to hedging,” Mr. Rowe said. “Before you think about hedging something, do you really want to own it to begin with?”
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More than 95% of the S&P 500’s constituents dropped Thursday, for example, for the third time in three weeks—a frequency that hasn’t been seen since March 2020, according to Susquehanna Financial Group.
The volatility continued early Friday. Futures briefly turned higher following the release of a strong April jobs report, before summarizing their slide. Some investors said the report was outweighed by worries about the Fed’s rate path.
The latest jobs report showed that the US economy added 428,000 jobs in April and that the unemployment rate remained unchanged at 3.6%. Economists surveyed by The Wall Street Journal had projected that 400,000 jobs were created in April and that the unemployment rate fell to 3.5%—where it stood just before the pandemic and a five-decade low.
The strong jobs report “could also mean that the Fed has a little bit more leeway to be aggressive,” said Amy Kong, chief investment officer at Barrett Asset Management.
In corporate news, DoorDash shares lost $1.04, or 1.4%, to $72.11 after the food-delivery company reported a rise in quarterly revenue late Thursday, though its rate of growth for the quarter slowed. Under Armour’s Class A shares tumbled $3.40, or 24%, to $10.89 after it said Covid-19-related supply-chain pressures hurt its sales in the latest quarter. It warned that the issues weren’t going away soon.
DraftKings shares lost $1.29, or 8.9%, to $13.15 after the company said first-quarter sales rose but its loss kept widening as it is sought to attract customers.
Brent crude, the global oil benchmark, rose 4.9% this week to $112.39 a barrel, extending a recent run of gains driven by expectations that the European Union was set to ban imports of Russia’s oil in response to its invasion of Ukraine. Gold prices fell 1.5% this week to $1881.20 a troy ounce.
Overseas, benchmark indexes in both Asia and Europe retreated Friday, tracking losses in the US, with declines most pronounced for the tech-heavy Hang Seng Index, which slumped 3.8%. In mainland China, the Shanghai Composite Index fell 2.2%. In Europe, the pan-continental Stoxx Europe 600 fell 1.9%.
–Rebecca Feng contributed to this article.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com and Will Horner at William.Horner@wsj.com
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