Stock Market This Week (US): Why did Nasdaq fall 2% this week?

Stock Market This Week (US)

After the previous week's exceptional rally, the US stocks ended lower this week. The Dow ended 0.01% lower, while S&P 500 lost 0.69% for the week. Nasdaq was the worst performing among the major three with 1.57%.

US stock market this week: Stocks movement this week

The US market fell on Monday as investors paused last week's big rally and digested economic and corporate news. The market opened slightly lower and was dragged further down towards the close. Investors also looked forward to the third-quarter earning season.

On Tuesday, the US market bounced back after the producer price index (a measure of wholesale inflation) showed a 0.2% increase for October, versus an estimate of 0.4%. Dow and S&P slipped into negative territory for a brief period after crude oil prices moved higher. However, the prices eased later in the day.

The US market fell on Wednesday as investors weighed a gloomy holiday quarter update from Target that pressured retail stocks. The 10-year Treasury yield temporarily went below 3.7%, and the spread between it and the 2-year yield continued to fall deeper into negative territory. It is called yield inversion and is a recession warning.

On Thursday, the US stocks continued their downtrend as optimism around easing inflation and a Fed policy shift waned. The S&P 500 was down 0.3% after coming off of a session low of more than a percent, while the Dow lost 300 points and NASDAQ was down 0.4%.

The US stocks closed the week on Friday on a positive note as investors assessed tougher language from Federal Reserve speakers and pored over the latest earnings reports. Dow and S&P gained over half a percent and Nasdaq closed flat.

US stock market this week: Major events

Quarterly results: Nvidia's revenue and earnings fell for the quarter on weaker demand, even though the guidance was not looking positive. Nu Holding's revenue jumped 171% year on year. Check the details here. Target reported a disappointing September quarter number as EPS was down 49.3% and revenue grew marginally. Walmart reported an 8.7% jump in revenue, and a $20 billion share buyback.

Producer Price Index: The producer price index rose 0.2% in October and was below the 0.4% estimate. A significant contributor to the slowdown in wholesale inflation was a 0.1% decline in services, the first outright decline in that measure since November 2020. On a year-over-year basis, PPI rose 8% compared to an 8.4% increase in September.

Recession indicator touches four-decade high: The US Treasury yield curve inverted further during the week, driving the inversion in the two-year/10-year curve segment—historically, a typical but not conclusive indicator of a coming recession to its deepest level in over 40 years.

Treasury yield: The yield on the benchmark 10-year Treasury traded higher towards the close on Friday at 3.819%. The 30-year Treasury yield was trading closed around 3.932%, after trading above 4% last week.