Nasdaq, S&P Slide Amid Netflix Dip and Semiconductor Declines; American Express Lifts Dow

New York, NY (Reuters) — On Friday, the Nasdaq Composite and S&P 500 concluded in the red, influenced by a dip in Netflix (NASDAQ:NFLX) shares, although the Dow Jones Industrial Average remained buoyant, supported by positive earnings from American Express (NYSE:AXP). A mounting skepticism over the Federal Reserve’s potential interest rate cuts also impacted market sentiment negatively.

Netflix experienced a notable decline, posing a significant impact on both the S&P 500 and the Nasdaq, after the streaming giant’s projected second-quarter revenue did not meet analyst forecasts. Additionally, Netflix’s unexpected decision to stop reporting subscriber figures further unsettled investors.

Conversely, the Dow saw an uptick, largely due to American Express’s shares climbing after the company reported a first-quarter profit that exceeded expectations. Despite a robust five-month rally that began last November, the broader stock market has faced challenges, partly due to anticipations of early-year Federal Reserve rate cuts.

Recent data, including stronger-than-anticipated inflation figures, robust employment statistics, increasing oil prices due to Middle Eastern tensions, and comments from Fed officials such as Chairman Jerome Powell, have led analysts to reconsider the likelihood of imminent rate cuts. Mike Dickson, the head of research at Horizon Investments, noted, “The market should adjust expectations as the economic data doesn’t support imminent rate reductions.”

On the day, the Dow Jones Industrial Average climbed 211.02 points, or 0.56%, ending at 37,986.40. The S&P 500, however, fell 43.89 points, or 0.88%, to 4,967.23, and the Nasdaq Composite dropped 319.49 points, or 2.05%, closing at 15,282.01. Over the week, the Dow marginally gained, whereas the S&P and Nasdaq saw significant declines, marking their longest losing streak since October 2022.

Federal Reserve officials have adjusted their focus from rate cuts to managing persistent inflation, with Chicago Fed President Austan Goolsbee indicating a halt in progress on reducing inflation. Furthermore, sectors such as semiconductors, closely tied to advancements in artificial intelligence, also experienced downturns, with the Philadelphia Semiconductor Index recording its steepest weekly drop in nearly two years.

In the meantime, shares of Paramount Global soared 13.4% following reports that Sony Pictures Entertainment and Apollo Global Management are considering a joint acquisition bid. Market activity on the New York Stock Exchange saw more stocks advancing than declining. Trading volumes on U.S. exchanges reached 11.48 billion shares, higher than the recent average.

This persistent volatility underscores the complexity of current market dynamics, where earnings performance and macroeconomic indicators are pivotal in shaping investor sentiment.

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