NY, U.S. equities dipped Friday, headed by technology megacaps that have led this year's surge, as investors considered next week's Federal Reserve meeting. After this week's higher-than-expected inflation figures, traders have reduced Fed rate cut bets for June.
A day after Adobe (ADBE.O), opens new tab predicted second-quarter revenue below analysts' projections, blaming competition and lackluster demand for its AI-integrated photography, illustration, and video, shares fell 13.7%. S&P 500 technology index (.SPLRCT), opens new tab down 1.3%, leading sector falls. MSFT.O declined 2.1% and was a major index drag.
Semiconductor index (.SOX) down 0.5% on Friday, its worst weekly drop since early January. The March 18–21 Nvidia (NVDA.O) GTC developer conference will be scrutinized for AI announcements. Everyone seems to know rates will drop. Although the timeline keeps shifting, investors still believe it will happen "Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
"It's been a back-and-forth market as people reposition and consider whether some of the real winners have just gone a little bit too far, so you're seeing them trade off." Dow Jones Industrial Average (.DJI) lost 190.89 points, or 0.49%, to 38,714.77. The S&P 500 (.SPX) fell 33.39 points, or 0.65%, to 5,117.09, and the Nasdaq Composite (.IXIC) down 155.36 points, or 0.96%, to 15,973.17.
Major indexes fell slightly this week. Dow, S&P 500, and Nasdaq fell 0.02%, 0.1%, and 0.7%, respectively. Friday saw the "triple witching," or simultaneous expiration of quarterly derivatives contracts connected to stocks, index options, and futures, which can enhance volume. With 18.76 billion shares traded Friday, U.S. exchanges had the year's biggest volume. The average full-session volume over the last 20 trading days was 12.4 billion.
According to SpotGamma founder Brent Kochuba, investors' options positions started the week with call contracts, which indicate a bullish tilt. The S&P 500's failure to advance soon undermined upside call options' value, further depressing the market, he said. Wall Street's AI-driven surge has slowed, but the S&P 500 still up 7.3% this year.
In February, U.S. factory production rose more than predicted, although January was lowered down substantially as rising interest rates slowed manufacturing. This month, the University of Michigan's preliminary consumer confidence index was 76.5, compared to 76.9.
All eyes are on next week's Fed meeting for rate lowering hints. Ulta Beauty (ULTA.O), opens new tab declined 5.2% after expecting full-year profit below Wall Street projections due to rising supply-chain expenses and promotions. Advancers outweighed decliners 1.11-to-1 on the NYSE and 1.12-to-1 on Nasdaq. The S&P 500 had 27 52-week highs and no lows, while the Nasdaq Composite had 53 and 134.
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