Stocks Struggle as Investors Shift Focus:
Last week, stocks faced increased pressure as investors appeared to shift away from mega-cap tech stocks and toward sectors that may benefit from lower interest rates.
The S&P 500 Index fell 1.97%, while Nasdaq Composite Index declined 3.65%. The Dow Jones Industrial Average bucked the downward trend, up 0.72%. The MSCI EAFE Index, which tracks developed overseas stock markets, slid 1.48% for the week through Thursday’s close.1
Source: Charles Schwab & Co., Inc
Dow Leads Again
Last week began very differently than it ended. All three averages rallied over the first couple of days this week, with the Dow leading on both days. Fed Chair Powell indicated the Fed may not wait for inflation to reach its 2% target before considering a rate move, buoying the markets.2,3
Then, markets hit a speed bump as investors appeared to take profits and rotated away from mega-cap tech names. The selling broadened beyond tech-related names on Thursday as all but one of the S&P 500’s 11 sectors fell.
Early Friday morning, a global tech outage caused disruptions for businesses, governments, and financial institutions, contributing to the weekly decline. Despite its losses in the second part of the week, the Dow finished in the green.4,5,6
Source: Charles Schwab & Co., Inc
Upbeat Economic Data
Although stocks were under pressure, some investors saw “green shoots” in a few economic reports. Housing starts rose 3% in June and building permits also ticked higher. Retail sales were unchanged in June, which was better than expected. Investors were encouraged that consumers were still spending despite ongoing inflation.7,8
This Week: Key Economic Data
Source: Bloomberg Finance L.P.
This Week: Companies Reporting Earnings
Source: EarningsWhispers
Author
Gary Aiken
Chief Investment Officer
Concord Asset Management
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Footnotes and Sources
1The Wall Street Journal, July 19, 2024
2CNBC.com, July 15, 2024
3CNBC.com, July 16, 2024
4MarketWatch.com, July 17, 2024
5CNBC.com, July 18, 2024
6The Wall Street Journal, July 19, 2024
7KPMG.com, July 17, 2024
8AP.com, July 16, 2024
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