US Market Weekly: S&P 500 and Nasdaq Resume Decline After Last Week's Rally

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All three indexes finished negative on the holiday-shortened week. The S&P 500 fell 1.2% this week, while the Dow and the Nasdaq each lost nearly 1%.

The stock market was closed on Monday on account of Memorial Day.

The US market started the trading week on Tuesday and closed the see-saw day on a negative note. It also marked the close of the month which saw the S&P 500 flirt with bear-market territory amid inflation and recession fears. Energy stocks comprised the worst-performing S&P 500 sector Tuesday.

The US stocks pulled back in choppy trading Wednesday amid worries about the health of the economy. Financial stocks comprised the worst-performing S&P 500 sector. The benchmark US Treasury yield climbed. Rising rates discount the value of future earnings and can make stocks look less attractive.

All major indexes snapped a two-day losing streak and closed on a positive note on Thursday. Microsoft warned investors that revenue and earnings this quarter would fall short of analysts’ estimates. The Fed’s Vice Chair said it is unlikely the central bank will take a break from its current rate hiking cycle anytime soon.

US stocks fell on Friday to close the week lower as investors digested a stronger-than-expected jobs report and its implication for monetary policy going forward. The benchmark 10-year Treasury yield climbed above the 2.9% level.

Key highlights of the week:

May job report: The US economy added 390,000 jobs in May, better than expected despite fears of an economic slowdown and a roaring pace of inflation. The unemployment rate held at 3.6%, just above the lowest level since December 1969. Average hourly earnings increased 0.3% from April, slightly lower than the 0.4% estimate. The year-over-year increase in wages of 5.2% was in line with expectations.

Crude Oil prices: Crude oil prices climbed for a seventh-straight week as demand continued to outstrip supply, amplified by the ramifications of the ongoing war in Ukraine that has stymied a key energy source. A decision by OPEC+ to boost production in July and August appeared to have little impact on cooling off the surging price of oil. 

Treasuries yields: It climbed across the board towards the end of the week recording their largest one-week gains in at least a month after stronger-than-expected US jobs report for May. The yield on the 10-year Treasury note rose 4.1 basis points to 2.955% from 2.914%. It gained 20.7 basis points this week.

Job openings show a sharp decline in April: Job openings fell by nearly half a million in April, narrowing the historically large gap between vacant positions and available workers. The openings total declined by 455,000 from the upwardly revised March number to 11.4 million in April.