Wall Street Experiences Broad Losses
U.S. stocks faced declines on Friday as weak consumer sentiment and disappointing earnings guidance from the tech sector weighed on markets. The Dow Jones Industrial Average fell 148.82 points (0.3%) to 44,424.25, while the Nasdaq Composite slid 99.38 points (0.5%) to 19,954.30. The S&P 500 also dropped 17.37 points (0.3%) to 6,101.24. Semiconductor stocks bore the brunt of the losses, with the Philadelphia Semiconductor Index plunging 1.9%.
Texas Instruments (TXN) led the downturn in the semiconductor sector, tumbling 7.5% after reporting better-than-expected fourth-quarter results but issuing lackluster earnings guidance for the current quarter. Conversely, pharmaceutical stocks outperformed, with the NYSE Arca Pharmaceutical Index climbing 1.4%. Novo Nordisk (NVO), a Danish pharmaceutical giant, saw its U.S.-listed shares surge 8.5% after announcing positive trial results for its obesity drug.
Consumer Sentiment and Housing Data in Focus
Investor sentiment was further dampened by disappointing data from the University of Michigan, which revised its January consumer sentiment index downward to 71.1 from an earlier estimate of 73.2. This marks the first decline in six months and a drop from December’s reading of 74. The unexpected dip in consumer sentiment has added to market uncertainty, as the Federal Reserve continues to weigh economic indicators ahead of its next policy meeting. According to CME Group’s FedWatch Tool, there is a 71.1% probability of at least a quarter-point rate cut following the Fed’s June meeting.
Meanwhile, housing market data offered a silver lining, with the National Association of Realtors reporting a surprising jump in existing home sales for December. Sales reached their highest level since February of the previous year, signaling resilience in the housing sector despite broader economic concerns.
Global Markets Present Mixed Picture
International markets showed a mixed performance. In Asia, most indices moved higher, with Hong Kong’s Hang Seng Index surging 1.9% and South Korea’s Kospi advancing 0.9%. Japan’s Nikkei 225, however, bucked the trend, edging down by 0.1%. European markets were less optimistic, with the U.K.’s FTSE 100 Index falling 0.7%, while France’s CAC 40 and Germany’s DAX each slipped by 0.1%. In the bond market, U.S. treasuries gave up early gains but closed modestly higher, with the yield on the benchmark ten-year note dipping 1.2 basis points to 4.62%.
Oil and networking stocks in the U.S. also struggled during the session, adding to the day’s mixed performance. The divergence between sectors and global markets highlights the cautious sentiment gripping investors as they assess economic data and corporate earnings.
