As we approach the long weekend here in Utah, the financial markets have performed rather disappointingly. Consistent with the themes seen throughout the week, geopolitics and criticism surrounding AI dominated the headlines. While recent inflation reports from prior weeks helped calm the markets, Brent crude oil breaching the $100-per-barrel mark renewed investors’ inflation concerns. Meanwhile, Alphabet Inc.’s earnings call yesterday gave skeptics additional reasons to sell, as the company raised its capital expenditure target once again.
The Dow Jones Industrial Average declined by 507 points to 51,712. The Nasdaq fell 2.15% to 25,138. The S&P 500 dipped 1.21%, testing the 7,400 level. On a weekly basis, all three indices declined by more or less around 1%. Industrials, healthcare, utilities, and energy stocks ended the day in positive territory, while all other sectors posted losses. Consumer discretionary led the declines with a 4.61% drop, followed by communication services with a 3.5% slide.
Interest rates also began reaching new highs, which is bad news for asset prices. The 5-year U.S. Treasury yield rose to 4.45%, while the 10-year yield increased to 4.7%. The 30-year yield also began testing the upper end of its range from the past several years and is currently just one and a half basis points below its multi-year high. Gold reversed course and fell below the 4,100 level once again.
Although economic data was limited this week and the focus remained on geopolitics and corporate outlooks, next week will be packed with activity, including a Federal Reserve policy meeting followed by the release of an important inflation gauge.
Adams Wealth Advisors will be observing Pioneer Day tomorrow and will return next week with more updates. We wish our fellow Utahns an enjoyable long weekend.