Stocks rose on Friday as Wall Street attempted to find its footing after a brutal week of selling.
The Dow Jones Industrial Average rose 70 points, or 0.2%, while the S&P 500 advanced 0.5% and the Nasdaq Composite rose 1.3%.
The moves come as investors are 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.
“This week was brutal. … Let me tell you, we’re in a recession,” Wharton Business School professor Jeremy Siegel said Thursday on CNBC’s “Closing Bell: Overtime.” “It’s a mild recession. It’s not an official recession by the NBER, certainly not yet, but this first half is negative GDP growth, and it’s ending on a slide.”
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. This event happens once a quarter and typically leads to a surge in trading volume, making for choppy trading action as traders close out positions.
The S&P 500 is down about 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 briefly 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 4.5% for the week, on track for its 11th negative week in 12. The tech-heavy Nasdaq Composite is down 5.2% for the week.
Shares of Intel, Cisco, and Salesforce jumped more than 1% on Friday, bringing the Dow slightly higher. All major sectors aside from energy and materials moved higher, aside from energy and materials.
Beaten-up tech shares staged a rally on Friday, with shares of Tesla and Netflix up 3% and 2%, respectively. Apple, Alphabet, and Microsoft added about 1% each. Travel stocks Airbnb, Carnival, and Norwegian Cruise Line added about 3% each.
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 risks of a recession are rising while achieving a soft landing for the US economy appears increasingly challenging,” wrote UBS’ Mark Haefele. “Against this backdrop, we now see less upside for stocks this year, with slowing economic growth weighing on profit growth and higher bond yields depressing valuations,” he added.