Following the notable rebound seen in the previous session, stocks have shown a significant move back to the downside during trading on Friday. The major averages have all slid firmly into negative territory, with the Dow falling to a two-month intraday low.

Currently, the major averages are just off their worst levels of the day. The Dow (DOWI:DJI) is down 352.19 points or 0.9 percent at 38,106.89, the Nasdaq (NASDASQI:COMP) is down 217.48 points or 1.3 percent at 16,224.72 and the S&P 500 (SPI:SP500) is down 52.83 points or 1.0 percent at 5,146.23.

A steep drop by JPMorgan Chase (NYSE:JPM) is weighing on the markets, as the financial giant has plunged by 5.8 percent to its lowest intraday level in well over a month.

JPMorgan Chase is under pressure after reporting better than expected first quarter results but providing disappointing guidance for net interest income, a key profit metric.

Shares of Citigroup (NYSE:C) have also moved to the downside even though the company reported first quarter results that exceeded analyst estimates.

Inflation concerns also continue to weigh on the markets, as the Labor Department released a report showing import prices in the U.S. increased by slightly more than expected in the month of March.

The report said import prices climbed by 0.4 percent in March after rising by 0.3 percent in February. Economists had expected import prices to increase by another 0.3 percent.

Import prices also rose by 0.4 percent compared to the same month a year ago, marking the first year-over-year increase since January 2023.

Meanwhile, the Labor Department said export prices rose by 0.3 percent in March after climbing by a revised 0.7 percent in February. The increase in export prices matched economist estimates.

Compared to the same month a year ago, export prices were down by 1.4 percent in March following a 1.8 percent slump in February.

Stocks saw further downside after the University of Michigan released preliminary data showing a bigger than expected decrease in consumer sentiment in April along with an increase in inflation expectations.

The University of Michigan said its consumer sentiment fell to 77.9 in April from 79.4 in March. Economists had expected the index to edge down to 79.0.

The report also said year-ahead inflation expectations rose to 3.1 percent in April from 2.9 percent in March, climbing just above the 2.3-3.0 percent range seen in the two years prior to the pandemic.

Long-run inflation expectations also increased to 3.0 percent in April from 2.8 percent in March, the University of Michigan said.

Surveys of Consumers Director Joanne Hsu said the uptick in inflation expectations reflects “some frustration that the inflation slowdown may have stalled.”

Sector News

Airline stocks have shown a substantial move to the downside on the day, with the NYSE Arca Airline Index plummeting by 3.9 percent to a two-month intraday low.

Significant weakness is also visible among semiconductor stocks, as reflected by the 2.9 percent plunge by the Philadelphia Semiconductor Index.

Computer hardware stocks are also seeing considerable weakness, resulting in a 2.3 percent slump by the NYSE Arca Computer Hardware Index.

Networking, software and banking stocks have also shown notable moves to the downside, while gold stocks are bucking the downtrend amid a sharp increase by the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Friday. Hong Kong’s Hang Seng Index plunged by 2.2 percent and China’s Shanghai Composite Index fell by 0.5 percent, although Japan’s Nikkei 225 Index bucked the downtrend and crept up by 0.2 percent.

Meanwhile, the major European markets have turned mixed on the day. While the U.K.’s FTSE 100 Index is up by 1.1 percent, the German DAX Index and the French CAC 40 Index are both down by 0.2 percent.

In the bond market, treasuries have moved back to the upside after ending the previous session slightly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 8.7 basis points at 4.489 percent.


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