Shared by Sam Lawhon, Larson Director of Investments

Market Recap

The S&P 500 index fell 3% this week, led by the technology and consumer discretionary sectors, as investors digested a mixed round of quarterly financial results and escalating turmoil in the Middle East.

The market benchmark ended Friday’s session at 4,967.23, the third straight weekly decline.

The S&P 500 is down 5.5% this month. It is still in positive territory for 2024 with a year-to-date rally of 4.1%, shrinking from the 10% gain at the end of March.

This week’s drop came amid a mixed round of corporate results. Among the S&P 500 components that released quarterly reports this week, 79% had better-than-expected earnings, while only 55% had better-than-forecast revenue, according to Bloomberg data.

Adding to investor concerns, Chicago Fed President Austan Goolsbee said progress made by the Federal Reserve in easing inflationary pressures has “stalled,” and it “makes sense” to extend the pause rather than cut interest rates.

Tumult in the Middle East, where Israel launched a retaliatory strike on Iran, also weighed on the market as investors worried about potential impacts on oil supplies and energy prices.

The technology sector had the largest percentage drop this week, sliding 7.3%, followed by a 4.5% drop in consumer discretionary, a 3.6% decline in real estate and a 3.2% skid in communication services. Other sectors posting declines included industrials, energy, materials and health care.

Super Micro Computer (SMCI) shares led the tech slide, tumbling 20% on the week, as the company announced its fiscal Q3 earnings release date without offering preliminary results for the quarter, disappointing investors. The company had released preliminary Q2 results about 11 days before full earnings, boosting its sales outlook.

Weighing down the consumer discretionary sector, shares of Tesla (TSLA) dropped 14% as analysts said Chief Executive Officer Elon Musk must address key issues next week, including the debate around the Model 2 vehicle and robotaxis as well as his recent 25% ownership remarks, to ease investor concerns amid waning electric vehicle demand. This comes after the company posted lower Q1 deliveries that missed analysts’ expectations earlier this month.

In real estate, shares of Prologis (PLD) fell 13% as the logistics real estate investment trust reported Q1 core funds from operations and revenue that only matched Street views and tempered expectations for the full year amid a slowdown in leasing activity.

Three sectors climbed this week. Utilities rose 1.9%, consumer staples increased 1.4% and financials edged up 0.8%.

Gainers in the utilities sector included shares of Consolidated Edison (ED), which rose 3.5% as the energy delivery company maintained its quarterly dividend rate.

Next week, earnings reports are expected from a number of heavyweight companies including Verizon Communications (VZ), Visa (V), Tesla, Pepsico (PEP), GE Aerospace (GE), Meta Platforms (META), International Business Machines (IBM), AT&T (T), Boeing (BA), Microsoft (MSFT), Alphabet (GOOGL), Merck (MRK), Caterpillar (CAT), Exxon Mobil (XOM) and Chevron (CVX).

Economic data due next week will feature Q1 gross domestic product as well as the latest consumer price index, a closely watched inflation reading. Other reports expected next week include March new home and pending home sales as well as durable goods orders.

Provided by MT Newswires

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The S&P 500® Index is a capitalization index of 500 stock-designed to measure performance of the broad domestic economy through changes in the aggregate market value of stock representing all major industries. https://us.spindices.com/indices/equity/sp-500 The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities. https://us.spindices.com/indices/equity/dow-jones-industrial-average The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. Today the NASDAQ Composite includes over 2,500 companies, more than most other stock market indexes. Because it is so broad-based, the Composite is one of the most widely followed and quoted major market indexes. https://indexes.nasdaqomx.com/Index/Overview/COMP The MSCI World Index, which is part of The Modern Index Strategy, is a broad global equity benchmark that represents large and mid-cap equity performance across 23 developed markets countries. It covers approximately 85% of the free float-adjusted market capitalization in each country and MSCI World benchmark does not offer exposure to emerging markets. The MSCI Emerging Markets (EM) Index is designed to represent the performance of large- and mid-cap securities in 24 Emerging Markets countries of the Americas, Europe, the Middle East, Africa and Asia. As of December 2017, it had more than 830 constituents and covered approximately 85% of the free float-adjusted market capitalization in each country. https://www.msci.com/ The S&P GSCI Crude Oil index provides investors with a reliable and publicly available benchmark for investment performance in the crude oil market. https://us.spindices.com/indices Companies in the S&P 500 Sector Indices are classified based on the Global Industry Classification Standard (GICS®). https://us.spindices.com/indices