Stocks retreated on Friday, wrapping up a tumultuous week as Nvidia’s impressive ascent paused.
“The market saw some pullback today, primarily driven by the cooling off of Nvidia’s extraordinary performance,” said an analyst.
The S&P 500 closed down 0.65% at 5,123.69, while the Nasdaq Composite slipped 1.16% to 16,085.11. Earlier in the day, both had surged to fresh all-time highs before reversing course. The Dow Jones Industrial Average ended the day down 0.18% at 38,722.69.
For the week, all three major indexes posted losses. The S&P 500 retreated by 0.26%, the Dow slid 0.93%, and the Nasdaq dropped 1.17%, marking the Dow’s worst week since October.
Friday’s downturn was largely attributed to Nvidia’s retreat. The tech giant, celebrated for its advancements in artificial intelligence, saw its shares tumble more than 5%, marking its worst session since late May.
Despite Friday’s setback, Nvidia’s shares still closed the week up more than 6%, contributing to a staggering rally that has propelled its market cap by over $1 trillion since the start of the year.
Commenting on Nvidia’s retreat, Sam Stovall, chief investment strategist at CFRA Research, remarked, “It doesn’t mean that the longer-term upside potential is over. It just says that maybe we’ve gotten ahead of ourselves: We’ve gotten to an overbought situation, and it’s time to take some profits.”
Despite Nvidia’s drag on the tech sector, Apple managed to eke out a 1% gain in Friday’s trading session. This uptick marked a significant turnaround for the mega-cap stock, ending its longest losing streak since early 2022 at seven days. However, even with this positive movement, Apple’s shares still closed the week nearly 5% lower, positioning it as the poorest performer in the 30-stock Dow.
Meanwhile, investors closely analyzed labor market data released on Friday morning, seeking clues about the Federal Reserve’s potential interest rate adjustments.
The February jobs report presented conflicting signals regarding the timing of the Fed’s rate cuts. While the number of jobs added last month surpassed expectations, reaching 275,000 compared to the estimated 198,000, this robust figure suggests that the economy remains robust.
However, there were contrasting elements in the report. The unemployment rate unexpectedly edged higher to 3.9%, and wage growth fell short of expectations. These factors offer some hope that inflation may have eased sufficiently to satisfy the Fed. Additionally, data on January’s job growth was revised downward.
“In sum, people will be able to take away whatever message they want to from today’s reports,” remarked George Mateyo, chief investment officer at Key Private Bank. “However, we think the data skews positive and should provide sufficient confidence to the Fed that a modest adjustment to interest rates is appropriate.”
