US shares closed lower on Friday, shaving weekly gains for major indices that had been sparked by speculation that the US economy was in good standing and the Federal Reserve was close to the end of rate hikes. The selling was heavier in Nasdaq 100 after three tech companies reported disappointing results on Thursday. Friday’s volatile session closed a hectic week that brought a raft of corporate earnings, economic data and Fed’s policy decision. Warnings from Apple, Alphabet and Amazon weighed on overnight trading. Losses accelerated in the morning following a strong jobs report that should give the Fed room to remain aggressive if inflation stays high. Even with Friday’s losses, both the S&P and Nasdaq locked weekly gains, with the Nasdaq securing a fifth straight week of gains.
Investors took the early declines as an opportunity to chase the recent rally. Investor reaction in the treasury market was more straightforward, where policy-sensitive yields spiked on the threat of additional rate increases. The 2-year yield jumped more than 19 basis points after touching a low for the year earlier in the week. Trading on swaps indicated expectations that fed funds rates will hit close to 5%. A strong reading on the US economy’s services sector also bolstered concern that growth hadn’t sufficiently cooled to temper price gains.
European stocks closed modestly higher, erasing earlier losses on optimism over the region’s economy. The pan-European STOXX 600 index rose 0.34%, but MSCI’s gauge of stocks across the globe lost 1.08%. The STOXX index closed with a 1.23% gain on the week, its highest closing level since April 21. MSCI’s index was on track for a second straight weekly advance even with Friday’s tumble. German stocks were mixed, as gains in the Food & Beverages, Technology, Consumer & Cyclical sectors led shares higher while losses in the Construction, Financial Services and Telecoms sectors brought shares lower. French stocks were higher, as gains in the Technology, Industrials and Basic Materials sectors led shares higher.
Gold Futures for April delivery were down 2.82%. Crude oil for delivery in March fell 2.74% to hit $73.80 a barrel, while the April Brent oil contract fell 2.47% to trade at $80.14 a barrel. Oil prices fell in a volatile session on Friday, after strong U.S. jobs data raised concerns about higher rates and as investors waited for more clarity on the imminent EU embargo on Russian refined products.
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