Stock market today: S&P 500 Breaks 6-Week Winning Streak as Nasdaq Gains

In this article, we will take a look at what happened on the stock market today. US stocks mostly dipped on Friday, concluding a down week for the S&P 500 and the Dow Jones Industrial Average. Both indices ended their six-week winning streak, while a surge in mega-cap tech stocks propelled the Nasdaq to a seventh consecutive week of gains and a new record high.

Key points:

1. US stocks declined, breaking a six-week winning streak for the S&P 500 and the Dow.
2. The pullback was influenced by rising bond yields and strong economic data.
3. Attention is now shifting to upcoming tech earnings, particularly regarding trends in AI monetization.

A significant spike in bond yields this week posed a challenge for investors after a strong rally earlier in the month. The 10-year US Treasury yield jumped nearly 20 basis points, indicating that macroeconomic data suggests the economy remains robust and stable.

S&P 500 Ends Six-Week Winning Streak

Investors are closely monitoring third-quarter earnings results, with major tech firms like Apple, Meta, Microsoft, and Amazon scheduled to report next week. The focus will be on discussions around AI monetization trends as analysts sift through the earnings reports.

Global X research analyst Ido Caspi shared with Business Insider, "We anticipate that big tech earnings will show a blend of steady operational performance, AI-driven revenue growth, and resilient advertising, reflecting ongoing health and innovation." He added, "We expect to see further signs of generative AI progressing from experimentation to widespread monetization."

So far, 36% of S&P 500 companies have reported their results, with 79% surpassing profit estimates by a median of 6%, and 58% exceeding revenue expectations by a median of 2%, according to Fundstrat data.

Next week, traders will also evaluate several key economic updates, including the September personal consumption expenditures, the Federal Reserve's preferred inflation measure, and the October jobs report, which revealed a remarkable addition of 254,000 jobs in September. A similarly strong report could dampen rate-cut expectations, indicating less urgency from the Fed to stimulate the economy.

Nasdaq closes higher ahead of a heavy week of earnings

The Nasdaq closed higher on Friday, fueled by gains in megacap stocks as investors prepared for upcoming quarterly results from some of Wall Street’s largest companies. Tesla shares rose 3.36% following a 22% jump the previous day, driven by the electric vehicle maker's optimistic sales forecast. Amazon, Apple, and Microsoft also saw gains.

“Tesla’s performance has reignited investor optimism that the Magnificent Seven rally is still alive,” noted Brian Jacobsen, chief economist at Annex Wealth Management.

The Nasdaq Composite recorded its seventh consecutive winning week, closing at an all-time high after gaining 0.56% on Friday, which brought the week’s total increase to 0.2%.

In contrast, the S&P 500 and Dow Jones Industrial Average ended their six-week positive streak with declines on Friday. The tech-heavy Nasdaq benefited from a strong rally in Tesla shares, while investors looked ahead to upcoming earnings reports from major tech firms, with stocks of Meta, Amazon, and Microsoft rising by as much as 1%.

Earnings season has been mixed thus far. Although nearly three-quarters of S&P companies have exceeded expectations, as per FactSet data, the overall rate of profit growth has fallen short, disappointing investors. Additionally, more than half of the 20 largest companies experienced stock declines following their financial announcements last week.

Here’s how US indexes closed at 4:00 p.m. on Friday:
S&P 500: 5,808.12, down 0.03%
Dow Jones Industrial Average: 42,114.40, down 0.61% (-256.96 points)
Nasdaq Composite: 18,518.61, up 0.56%

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.