Shares rose Friday as Wall Street struggled to hold its own after a brutal week of selling.
The Dow Jones Industrial Average rose 70 points, or 0.2%, while the S&P 500 rose 0.5% and the Nasdaq Composite rose 1.3%.
The moves come as investors become increasingly concerned about a potential economic slowdown. Several key economic data fell short of forecasts this week, ranging from retail sales in May to home launches. In addition, the Federal Reserve raised its benchmark interest rate by the most since 1994.
“This week has been 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 increase on 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 occurs once every quarter and typically leads to an increase in trading volume, causing choppy trading action as traders close positions.
The S&P 500 is down about 6% and is said to be headed for its worst weekly performance since March 2020. All 11 sectors are at least 15% below their recent highs.
The Dow briefly bounced above 30,000 after falling below that level for the first time since January 2021. The 30 stock average is down 4.5% for the week and is on track for the 11th negative week in 12. Nasdaq Composite fell 5.2% for the week.
Shares of Intel, Cisco and Salesforce rose more than 1% on Friday, pushing the Dow slightly higher. All major sectors except energy and materials rose higher, except energy and materials.
Beaten-up tech stocks rallied Friday, with shares of Tesla and Netflix rising 3% and 2%, respectively. Apple, Alphabet and Microsoft each added about 1%. Travel shares Airbnb, Carnival and Norwegian Cruise Line each added about 3%.
Comments by Federal Reserve Chairman Jerome Powell on Friday echoed the central bank’s commitment to curb inflation after raising interest rates by 75 basis points earlier this week. The Fed is “acutely focused on bringing inflation back to our 2 percent target,” he said.
Recession risks are mounting, while achieving a soft landing for the US economy becomes increasingly difficult, wrote UBS’ Mark Haefele. “Against this backdrop, we see less upside potential for equities this year, with slowing economic growth weighing on earnings growth and higher bond yields weighing on valuations,” he added.