US weekly: S&P 500 declined and ended its 3-week winning streak
The US stocks notched losses for the week as investors braced for tighter monetary policy from the Fed. All major averages declined for the week and ended their three-week winning streak.
The week started on Monday with Twitter climbing over 20% as Elon Musk revealed a big stake in the social media company. US oil prices jumped 3% on Monday, around $100 per barrel as supply concerns due to disruptions from Russia’s Ukraine war persisted.
The US stocks fell on Tuesday as the Fed Governor indicated the central bank could take a more aggressive approach to its tightening policy. The 10-year Treasury yield jumped to 2.56%. Tech stocks were the biggest losers of the day. Brent crude was trading at over $105 per barrel.
US stocks fell Wednesday as investors eyed more hawkish remarks from key monetary policymakers. With inflation rates in the US still holding at around 40-year highs and forcing the Fed's hand in aggressively tightening financial conditions. The US announced another round of sanctions on the Kremlin.
The market rebounded on Thursday after two losing sessions as investors reassessed the Federal Reserve’s latest plans to tighten monetary policy and combat rising inflation. Investors continue to monitor the Ukraine-Russia war, as Ukraine asks NATO for more weapons and the EU and US weigh a ban on Russian coal.
Tech stocks led losses on Friday as investors dumped the riskier shares in anticipation of higher interest rates limiting the group’s future profit growth. For the week S&P declined 1.3%, Nasdaq 3.9% and Dow Jones 0.3%.
Key highlights of the week:
Fed's meeting minutes: Minutes from the Fed’s mid-March policy meeting revealed that policymakers were prepared to reduce the central bank’s balance sheet by $95 billion per month, more than the consensus expectation of around USD 80 billion. The minutes also showed that officials were prepared to raise rates by 50 basis points (0.50%) at their upcoming May meeting.
Weekly jobless claims: The weekly jobless claims fell much more than expected to 166,000, the lowest number since 1968. However, continuing claims rose unexpectedly.
Markets this week: The major indexes finished lower for the week, with small-caps and growth stocks dragging the markets. Sector performance also varied widely with the typically defensive consumer staples and health care sectors recording solid gains, while IT, communication services, and consumer discretionary shares registered steep losses.
Mega Stock news: Twitter shares jumped over 27.0% on Monday, following news that Elon Musk had acquired a 9.2% stake in the social media firm. Musk is now the biggest shareholder in the company. On the other hand, Warren Buffett led Berkshire Hathaway bought an 11.4% stake in HP Inc. for $4.2 billion. HP shares rallied more than 15% after the news. Berkshire is now the biggest skate holder in the company.
Bond yields: The Fed’s plans for rapid quantitative tightening of reducing the bond holdings on its balance sheet caused the yield on the benchmark 10-year U.S. Treasury note to hit 2.71%, its highest level since early 2019. The yields on the 2-year notes rose 5 bps to 2.52%, while the rate on the 30-year bond increased 3 bps to 2.73%.