U.S. stocks fell Friday morning to wrap up April trading, with the Nasdaq Composite on pace for the worst month since March 2020.
The tech-heavy Nasdaq Composite fell 1.2%. The Dow Jones Industrial Average fell about 120 points, or 0.4%. The S&P 500 retreated by 0.9%.
Stocks were set to finish the month lower as investors have contended with a slew of headwinds, from the Federal Reserve’s monetary tightening, rising rates, persistent inflation, Covid case spikes in China and the ongoing war in Ukraine.
The Dow is off by 2.2% for the month and the S&P 500 is down 5.4%. The Nasdaq is down 9.5%, its worst monthly performance since the onset of the Covid pandemic.
“The current market performance is threatening to make a transition from a longish and painful ‘correction’ to something more troubling,” Marketfield Asset Management Chairman Michael Shaoul wrote. “What tends to be more important that price declines, is the length of time that it to repair a deep drawdown.”
“March 2020 for instance saw very sharp declines, but equally fast recoveries. The current episode looks much more likely to impose long lasting losses in investors that piled in during the 2021 rally, and is best thought of a ‘creeping bear market,’ that is steadily widening its net over prior market leadership,” Shaoul added.
Friday wraps up one of the busiest weeks for the first-quarter earnings season and a particularly intense one for tech companies, which have driven investor sentiment throughout the week.
The technology sector has been hard hit in April as high interest rates hurt valuations, and supply chain issues stemming from Covid and the war in Ukraine disrupt business.
Investor focus Friday was on Amazon, whose shares tumbled around 9% in extended trading after reporting Thursday evening a surprise loss thanks to its investment in Rivian and issued weak revenue guidance for the second quarter.
Apple shares were also under pressure despite an earnings beat, falling less than 1% after CFO Luca Maestri said supply chain constraints could hinder fiscal third-quarter revenue. The stock came off its premarket lows as analysts said to buy the dip.
Intel also reported earnings Thursday evening. The stock fell more than 4% in early morning trading after the company issued weak guidance for its fiscal second quarter.
Shares of Robinhood dropped more than 9% premarket, after the company reported a wider-than-expected loss, shrinking revenue and a decrease in monthly active users.
About 80% of S&P 500 companies have beat quarterly earnings expectations, with about half of the index’s members having reported results so far, according to FactSet.
“Despite what we view as a solid overall earnings period so far, the positive results look to be getting overshadowed by some of the broader concerns related to inflation and the Fed,” BMO’s Brian Belski said in a note to clients.
A hot inflation reading Friday underscored the difficult environment. The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — rose 5.2% from a year ago.
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