The S&P 500 and Nasdaq Composite experienced their steepest weekly declines since April, driven by a significant sell-off in technology stocks. A global IT outage exacerbated the downturn, affecting various sectors and leading to widespread disruptions. Investors are now looking ahead to upcoming earnings reports and economic data releases for further market direction.

Key Takeaways

• S&P 500 and Nasdaq Composite posted their worst weekly losses since April.
• A global IT outage caused by a CrowdStrike update added to market woes.
• Investors are shifting focus to upcoming earnings and economic data.

Market Performance

On Friday, the S&P 500 fell 0.7%, while the tech-heavy Nasdaq Composite declined 0.8%. The Dow Jones Industrial Average also slipped nearly 1%. This marked the worst week for the S&P 500 and Nasdaq since April, with the S&P 500 dropping almost 2% for the week and the Nasdaq losing about 3.7%.

Tech Sector Hit Hard

The technology sector led the sell-off, particularly AI-focused chip stocks. Nvidia, for example, saw a decline of more than 8% for the week. The sell-off was intensified by a global IT outage caused by a faulty update from cybersecurity firm CrowdStrike, which affected Microsoft-based systems and led to disruptions in airlines, banks, and other sectors.

Impact of the IT Outage

The IT outage had a broad impact, causing canceled and delayed flights, bank outages, and more. CrowdStrike shares plunged about 10% as a result. Microsoft shares were also affected, though to a lesser extent. The outage was eventually resolved, but not before causing significant market disruption.

Upcoming Earnings and Economic Data

Investors are now turning their attention to upcoming earnings reports from major companies like Tesla and Alphabet, as well as key economic data releases, including the June Core PCE inflation data and the second-quarter GDP print. These reports are expected to provide further insights into the state of the economy and consumer sentiment.

Other Market Movers

• Netflix: Despite reporting better-than-expected revenue and subscriber growth, Netflix shares fell about 2% due to weak third-quarter guidance.
• Oil Prices: Crude oil prices fell, with West Texas Intermediate down 3.15% to $78.74 a barrel and Brent crude down 2.75% to $82.77 a barrel.
• Bitcoin: The cryptocurrency rose 5.26% to $67,344, bucking the trend of declines in other asset classes.

Political and Economic Context

The market is also reacting to political developments, including comments from former President Donald Trump about ending the electric vehicle mandate, which affected shares of Tesla and other EV manufacturers. Additionally, concerns over potential tighter U.S. restrictions on semiconductor exports to China added to the tech sector’s woes.

Conclusion

The past week has been challenging for U.S. stocks, particularly in the tech sector. As investors look ahead to upcoming earnings and economic data, the market remains volatile. The resolution of the global IT outage and political developments will also play a crucial role in shaping market sentiment in the coming weeks.

Sources

• Stock market news today: S&P 500, Nasdaq post sharpest weekly losses since April amid tech rout, Yahoo Finance.
• Stock Market Today: S&P 500 suffers worst week since April amid wreck in tech By Investing.com, Investing.com.
• Stock market today: Wall Street finishes worst week since April with more losses | AP News, AP News.
• Stock Chart Icon, CNBC.
• Stock market today: Stocks tumble as the S&P 500 caps off its worst week in 3 months, markets.businessinsider.com.