U.S. stock market delivers mixed results as geopolitical tensions rise

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20th April 2024 – (New York) U.S. stocks closed mixed on Friday, reflecting investor caution amid ongoing geopolitical tensions and stubbornly high inflation rates. The Dow Jones Industrial Average experienced a modest rise, gaining 211.02 points, or 0.56 percent, to close at 37,986.4. This uptick was buoyed by a significant 6 percent increase in shares of American Express after the company reported strong earnings. In contrast, the S&P 500 and the Nasdaq Composite faced declines, shedding 43.89 points and 319.49 points respectively. This marked the longest losing streak for the Nasdaq in over a year, with both indices recording six consecutive days of losses, a phenomenon last seen in October 2022.

The sector performance within the S&P 500 varied, with utilities and financials sectors leading the gains, while technology and communication services sectors faced the steepest declines. This sectoral imbalance highlights the diverging investor sentiments regarding different areas of the economy.

Amidst market fluctuations, Chicago Federal Reserve President Austan Goolsbee voiced concerns on Friday regarding the challenges in curbing inflation. He noted that while the labor market remains strong, the path to easing inflation is less straightforward than anticipated. This has led to a recalibration of expectations concerning interest rate cuts, with the Fed maintaining its policy rate in the 5.25-5.50 percent range since the previous summer.

The CBOE Volatility Index, often referred to as the market’s “fear index,” escalated to 21.36 points, crossing the 20-point mark for the first time since late October 2023. This rise in volatility reflects growing market uncertainties and a reassessment of risk among investors.

In corporate news, Netflix saw its shares plummet by over 9 percent despite reporting a substantial increase in subscribers and exceeding earnings expectations. This drop reflects broader market concerns, particularly in the tech sector, where companies like Nvidia and Super Micro Computer also suffered significant losses during the session, signaling a potential shift in investor focus away from previously favored tech stocks.