The S&P 500 fell slightly on Friday, retreating from record levels, while the strength in major technology names pushed the Nasdaq Composite to another all-time high.
The broad equity benchmark dipped 0.3% to 3,841.47 after closing at a record in the previous session. The Nasdaq rose 0.1% to another record close of 13,543.06, supported by Big Tech. The Dow Jones Industrial Average slid 179.03 points, or 0.6%, to 30,996.98.
other FAAMNGs ahead of their forthcoming earnings releases.”
Stimulus watch
Investors reassessed the outlook for President Joe Biden’s ambitious Covid stimulus plan. A growing number of Republicans have expressed doubts over the need for another stimulus bill, especially one with a price tag of $1.9 trillion proposed by Biden. Meanwhile, Democratic Sen. Joe Manchin has criticized the size of the latest round of proposed stimulus checks. Dissent from either party carries weight for Biden, who took office with a slim majority in Congress.
“The political reality of Washington is starting to impact markets, and it’s becoming more unclear when Democrats’ ambitious stimulus goals will become law,” said Tom Essaye, founder of Sevens Report.
Cyclical sectors, or those that would benefit most from additional stimulus, have put pressure on the broader market this week. Energy, financial, and materials were the biggest laggards, losing at least 1% each this week.
Meanwhile, with the S&P 500 up another 2.3% this year, some investors believe the market may be getting ahead of itself as hiccups with the vaccine rollout and economic reopening remain likely going forward.
“The Covid pendulum, which normally emphasizes vaccine optimism over the harsh near-term reality, is swinging back towards the latter (for now) as epicenter stocks get hit hard in Europe,” Adam Crisafulli, founder of Vital Knowledge, said in a note Friday.
Meanwhile, a Senate committee on Friday overwhelmingly supported former Fed Chair Janet Yellen as Biden’s Treasury secretary. If confirmed, she would be the first woman to lead the department.
