Stock Market Today: U.S. stocks fall sharply as Nasdaq lands in correction (2024)

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All three major indexes booked weekly drops, with the S&P 500 falling 2.1% for its worst week since April, according to FactSet data. The Dow fell 2.1% for the week, while the Nasdaq saw a weekly drop of 3.4%.

The Nasdaq’s slide left it in a correction, defined as a drop of at least 10% from a recent high. The index ended Friday down 10% from its record close of 18,647.45 on July 10, according to Dow Jones Market Data.

Friday's aggressive rally in U.S. government handed long-term yields their biggest weekly declines since the U.S. onset of the Covid pandemic in March 2020.

Ten- and 30-year yields respectively fell 40.4 basis points and 34.5 basis points this week, to 3.8% and 4.1%, for the biggest weekly declines since the period that ended on March 6, 2020.

Small-cap stocks in the U.S. have tumbled this week, with the Russell 2000 index on track for its biggest drop in more than a year.

The Russell 2000 was on pace to drop 6.8% for the week, according to FactSet data, at last check. That put the small-cap-focused equities index on course for potentially its worst week since March 2023.

Shares of major Wall Street banks in the U.S. were posting large declines in afternoon trading Friday, with Citigroup Inc.’s stock tumbling more than 7%, according to FactSet data, at last check.

Goldman Sachs Group Inc. was slumping 6%, putting it among the worst-performing stocks in the Dow Jones Industrial Average in afternoon trading. Shares of Wells Fargo & Co. were sliding 6.8%, while Morgan Stanley slid 6.4%, Bank of America dropped 5.6% and JPMorgan Chase & Co. sank 5%, according to FactSet data, at last check.

Bank stocks were broadly under pressure Friday afternoon, with the SPDR S&P Bank ETF down 3.7% on Friday afternoon while the Invesco KBW Bank ETF dropped 4.7%.

As for major U.S. stocks indexes, the blue-chip gauge Dow Jones Industrial Average was down 1.9% in afternoon trade, while the S&P 500 sank 2.2% and the technology-heavy Nasdaq Composite dropped 2.6%, according to FactSet data, at last check.

The selloff in Amazon shares Friday will sting a bit for Amazon founder Jeff Bezos, who owns a sizable stake in the e-commerce company.

With Amazon shares down 8.9% in afternoon trading Friday, that translates to a $15.2 billion paper hit to Bezos' Amazon position.

He owned about 928 million Amazon shares as of his most recent filing. That stake is still worth more than $155 billion after factoring in Friday's declines.

Meanwhile, the drop in Amazon's stock could translate to a $3.3 billion hit, on paper, to MacKenzie Scott, Bezos' former wife, who owns just over 200 million Amazon shares.

Amazon's stock is tumbling enough to trade below its 200-day moving average for the first time in 15 months.

It's down 9.1% at $167.37, while the 200-DMA came in at $168.52. The last close below that long-term trend tracker was May 8, 2023.

Amazon's stock is the only one of the Magnificent Seven tech giants to be below its 200-DMA.

The next closest is Microsoft Corp.'s stock, which is down 2.8% at $405.50, or just 0.4% above the 200-DMA at $403.81.

The softening of the labor market suggested an increased probability that the Federal Reserve may cut at successive meetings through the end of the year, according to David Doyle, head of economics at Macquarie Group.

Fed officials will be meeting in September, November and December.

With the unemployment rate up at 4.3% in July, the number has well exceeded the median participant estimate at the Fed’s meeting in June, Doyle noted.

“The report is likely to result in the FOMC placing even greater weight on the labor market when considering the timing and pace of rate cuts, something it made clear was already becoming the case at the July meeting,” Doyle wrote in a Friday note.

Almost all S&P 500 sectors were falling Friday afternoon, with only consumer staples posting a rise, according to FactSet data.

The consumer-staples sector, a traditionally defensive area of the stock market, was up 0.2% in afternoon trading. Meanwhile, the S&P 500 index was slumping 2.3% as its 10 other sectors traded in the red.

Consumer discretionary had the biggest losses, with its more than 5% drop on Friday afternoon making it the worst-performing sector in the S&P 500, FactSet data show, at last check.

Spreads on bonds issued by the Magnificent Seven group of companies moved wider on Friday as their stocks sold off sharply, capping a tumultuous week for big tech.

But buyers had emerged by mid morning, as the following charts from data solutions provider BondCliQ Media Services show. Just six of the group have outstanding bonds. Tesla has issued convertible bonds in the past but they have been converted to equity.

Spreads widened amid the carnage in stock markets where investors were beset by recession worries after recent data.

Apple has the most outstanding debt of the group after repeatedly tapping the market since 2013 to borrow the funds for its generous shareholder returns program.

Bonds issued by troubled chip maker Intel Corp. were getting crushed on Friday as the stock cratered toward a 50-year low, with spreads widening by 15 to 20 basis points as the selling gained momentum.

Adding to the gloom, S&P Global Ratings placed its A-minus rating on Intel to CreditWatch Negative, meaning it could downgrade the credit in the near-term.

The move “reflects our view that the company will likely miss the free cash flow and, possibly, leverage targets we view as consistent with the current rating,” the rating agency said in a statement.