After Monday’s sharp decline in equity markets rattled investors’ confidence, stocks churned uneasily through the week, fading further after an initial bounce Tuesday. Corrections like this are natural and expected during any bull market. By any historical standard, equity markets were long overdue for a pause of some sort. In the U.S. stocks were down sharply for the second week in a row, bringing the S&P 500 down to levels not seen since early-December. The stock market volatility has returned, with large daily market swings. The Dow Jones Industrial Average recorded intraday swings exceeding 500 points in each of the past six trading days, including four days with swings greater than 1,000 points. The primary driver of the decline was investors reaction to rising interest rates. The underlying reason for higher rates are expectations for stronger economic growth, which has led to concerns about higher inflation and more Fed short-term interest rate hikes.
U.S. bounced back from correction territory to close higher on Friday, but the market still posted hefty losses for the week. All main indexes rallied in the afternoon with technology, real estate and energy sectors leading the gains while 27 out of 30 Dow stocks finished higher. The Dow rose 1.4%, to close at 24,196 for a weekly drop of 5.2%, marking its largest weekly decline since January 2016.
The S&P 500 climbed 1.5%, to end at 2,619, with 10 of the 11 main sectors finishing with gains. For the week, the benchmark index lost 5.2%, also marking its largest weekly drop since early January 2016.
The Nasdaq Composite Index advanced 1.4%, to 6,874, but finished the week 5.1% lower, representing its worst week since early February of 2016.
Gold futures declined on Friday to suffer from their largest weekly loss in two months, as investors eyed volatility in global stocks and a leading dollar index aimed for its best weekly performance in more than a year. April gold fell $3.30, or 0.3%, to settle at $1,315.70 an ounce.
Oil prices fell Friday, with the U.S. benchmark marking its lowest settlement in seven weeks. The uptick in drilling activity fed concerns about growing U.S. production. March WTI crude fell $1.95, or 3.2%, to settle at $59.20 a barrel.
News in the virtual currency and Blockchain market was quiet to finish the trading week. Cryptocurrency prices climbed Friday, with bitcoin, trading to around a weekly high at $8,720. February bitcoin futures on Cboe Global Markets closed the week up 4% at $8,610 and on the CME Group Inc. futures finished the week 2.5% higher at $8,530.
Ether, which runs the Ethereum network, was higher by 6.8% at $872.