Stocks fell in afternoon trading on Wall Street on Friday, continuing a dismal streak as markets fret over high inflation and the possibility that higher interest rates could trigger a recession .
The S&P 500 fell 0.3% at 12:18 p.m. EST. The Dow Jones Industrial Average fell 97 points, or 0.3%, to 30,679 and the Nasdaq fell 0.4%.
The market is mired in a deep slump. The S&P 500 closed its worst quarter since the pandemic began in early 2020 on Thursday and its performance in the first half of 2022 was the worst since the first six months of 1970.
The benchmark has been in a bear market for the past month, meaning an extended decline of 20% or more from its most recent high. It is now down 21% from its peak at the start of this year.
The latest slip precedes a long holiday weekend. Financial markets in the United States will be closed on Monday for Independence Day.
Bond yields fell significantly. The 10-year Treasury yield, which helps set mortgage rates, fell to 2.88% from 2.97% last Thursday. The 2-year Treasury yield slipped to 2.82% from 2.92%.
Wall Street remains concerned about the risk of a recession as economic growth slows and the Federal Reserve aggressively raises interest rates. The Fed is raising rates to deliberately slow economic growth to calm inflation, but could potentially go too far and trigger a recession.
Economic data for the past few weeks has shown that inflation remains high and the economy is slowing. The latter raised hopes on Wall Street that the Fed will eventually ease its aggressive pressure to raise rates, which has weighed on equities, especially more expensive sectors like technology. Analysts don’t expect a big rally in equities until there are solid signs that inflation is easing.
Friday’s latest economic update for the manufacturing sector shows a continued slowdown in growth in June, sharper than economists expected. A report on Thursday showed a measure of inflation closely watched by the Fed rose 6.3% in May from a year earlier, unchanged from its level in April.
Earlier this week, a worrying report showed consumer confidence slipping to its lowest level in 16 months. The government also reported that the US economy contracted at an annual rate of 1.6% in the first quarter and weak consumer spending was a key driver of the contraction.
Kohl’s plunged 20.6% after the department store’s potential sale slumped amid a fragile retail environment as consumers lost confidence and cut spending. Kohl’s had entered into exclusive talks with Franchise Group, which owns Vitamin Shop and other outlets, for a deal potentially worth around $8 billion.
Tech stocks were among the biggest losers. Chipmaker Micron lost 5.6% after giving investors a disappointing profit forecast amid concerns over falling demand. This weighed heavily on other chipmakers. Nvidia fell 3.8%.