Tech stocks face headwinds as consumer confidence hits a new low.
Technology stocks’ recent rally boosted investors’ sentiments and the future outlook for a bright rally; however, the market has another say on that. Wall Street slides in the Friday afternoon session. According to Reuters, the S&P 500 benchmark heads for a weekly loss amid fears of spreading market turmoil.
The U.S. consumer sentiment hit a new six-month low, and the shared data on Friday shows that the consumer confidence gap is growing bigger each month. Following April’s CPI report, which came in lower than the market explanation of 5% for the first time since March 2021, consumer confidence dropped more significantly than expected in April, falling to 63.5, the lowest level since November of the previous year. In addition, long-term consumer inflation hit a 12-year high, raising more doubts and depressing market confidence.
Based on the given data and previous economic events, the major cause of the decline in consumer sentiment is the banking crisis turmoil and the Federal Reserve’s tightening policy.
On the one hand, regional banks like PacWest Bancorp still face difficulties and market uncertainties. The overall market came under pressure. Following the disclosure that it had given the Federal Reserve extra collateral, PacWest Bancorp’s stock fell by 3%. This action was taken to get an additional $3.9 billion from the emergency lending resources of the central bank. Investors are anticipating developments in the national debt ceiling debate. The specifics of a settlement are up for debate in Congress. By early June, Congress must decide whether to raise or suspend the cap. Administration officials have cautioned that the United States may have trouble paying its debts if it doesn’t.
On the other hand, the market remains under pressure due to the tightening labor market and the unease surrounding monetary policy. This, in turn, creates significant issues for the U.S. economy and its GDP growth pace.
The heavy tech composite Nasdaq dropped by 0.49%, led by weaker technology, ending the week’s session. On the subject of individual technology stocks, the American electric car manufacturing company Tesla led Nasdaq losses by a 2.43% decline in its price shares. Amazon and Netflix slid by an average of 1.6%. Apple was down by 0.54%, and Meta plunged by 0.8%.
After its Wednesday rally, the S&P 500 benchmark heads to a losing session. The index’s losses in today’s session are estimated at 0.16%.
The Dow Jones Industrial Average slides back and forth; as of 15:45 am ET, the indexes were down by 0.06%.
In the end, It is essential to keep a careful eye on inflation and consumer confidence indicators as the crisis develops. The dynamics of the market may be greatly impacted by any changes or advancements in these sectors. In the upcoming months, the market’s trajectory will also be shaped by the responses of market players and the measures taken by policymakers.
Meanwhile, the natural gas market is thriving; its gains are up for the fourth consecutive week in the U.S. After Friday’s afternoon trading session, gas prices were up by 0.79% to $2.272 per gallon.