Tech stocks drag down Nasdaq for a record sixth straight session, as Nvidia and geopolitical tensions stir market concerns
The Nasdaq Composite experienced a downturn for the sixth consecutive session on Friday, marking its longest losing streak in over a year, as reported by CNBC.
This decline occurred as shares of Nvidia fell sharply, contributing to the broader market challenges related to geopolitical tensions and persistent inflation.
On Friday, the tech-heavy Nasdaq dropped 2.05 percent to 15,282.01, while the broader S&P 500 decreased by 0.88 percent to 4,967.23, falling below the 5,000 mark. Both indices recorded their sixth consecutive day of losses, a sequence not observed since October 2022.
In contrast, the Dow Jones Industrial Average saw an increase of 211.02 points or 0.56 percent, closing at 37,986.40. This rise was bolstered by a more than 6 percent gain in American Express following its earnings report.
Netflix experienced a significant retreat, dropping over 9 percent despite surpassing quarterly earnings expectations. The company reported a 16 percent increase in subscribers from the previous year but announced it would stop reporting paid memberships starting in 2025.
The chip sector, including Nvidia and Super Micro Computer, faced heightened selling pressure, with Nvidia plunging 10 percent, marking its worst day since March 2020. Super Micro Computer's stocks tumbled more than 23 percent.
While tech stocks exerted downward pressure on the market, the initial investor concerns regarding the escalation of the Middle East conflict after Israel’s limited strike on Iran seemed to dissipate by the market's open on Friday.
Oil prices initially spiked more than 3 percent due to the geopolitical event, though they fluctuated between gains and losses throughout the day. Dow futures had earlier dropped over 500 points overnight amid fears of a broader conflict.
George Ball, chairperson of Sanders Morris, noted a “relief sigh” among investors as they recognized Israel's response was restrained, aiming to minimize escalation.
However, he pointed out that “investors are very much on edge” and increasingly considering geopolitical risks in their decision-making.
The market's tough week was highlighted by the S&P 500's worst weekly performance since March 2023, driven by concerns about inflation and monetary policy.
The index lost more than 3 percent and recorded its third consecutive negative week, largely due to declines in the tech sector, which was the worst-performing in the S&P 500.
The Federal Reserve is now expected to delay any reductions in borrowing costs until at least September, given the ongoing issues with inflation.
Bill Northey, investment director at US Bank Wealth Management, remarked on the complexities the market is trying to digest, noting that inflation has been “a little bit more problematic than I believe the market expected.”
The Nasdaq fell 5.5 percent over the week, its fourth consecutive week of losses and its worst weekly performance since November 2022. Despite the overall downturn, the Dow managed a slight gain of 0.01 percent for the week, marking its first positive week in the last three.
