Market Snapshot: U.S. stocks end mixed, but book weekly losses as Dow suffers longest losing streak since 1932

What’s driving markets?

A close below 3,837.25 would confirm that the S&P 500 entered a bear market, marking a fall of 20% or more from its Jan. 3 record close.

Read: The S&P 500 is trading in bear-market territory. How far could it fall?

Wall Street initially took a cue from a strong Asian session, where the Hong Kong Hang Seng
HSI,
+2.96%
ended about 3% higher and the China CSI 300 index
000300,
+1.95%
rose nearly 2%, but early gains Friday in the U.S. stock market proved fragile.

“Stocks remain on a shaky footing. Investors’ list of worries grows ever larger,” said Fawad Razaqzada, market analyst with City Index and Forex.com, in a note.

”Inflation. Interest-rate hikes. Low economic growth. Stagflation. Recession. Perhaps most importantly for stocks, the Fed is not there to provide cushion, like before,” he wrote.

Stocks were initially buoyed after the People’s Bank of China on Friday cut in its rate on five-year loans, aimed at shoring up weak housing sales by reducing mortgage costs. The country has been battling COVID outbreaks, with lockdowns in industrial hubs such as Shanghai blamed for weak factory and consumer activity data in April.

But analysts said the move also underlined concerns.

“Where the rest of the world is thinking of raising rates because of inflation, they’re cutting rates in order to help the economy,” said JJ Kinahan, chief market strategist for online brokerage firm tastytrade Inc., in a phone interview. “I think that’s a little bit of a warning sign,” as U.S. companies that benefit from demand in China may be hurt by a slowing Chinese economy as well as supply-chain disruptions linked to the country’s lockdowns, he said.

The S&P 500 traded into bear-market territory Friday afternoon, with all of its 11 sectors down, FactSet data show, at last check.

Friday is the final day of trading before the expiration of options tied to stocks and exchange-traded funds, which is seen potentially contributing to volatility ahead of the end of the session.

Major U.S. stock indexes remain on track for another week of losses, with investors worried about whether soaring inflation can be brought under control by the Federal Reserve without derailing the economy.

The Dow is heading for its eighth straight weekly decline, which would be its longest since April 1932, according to Dow Jones Market Data. The S&P 500 and Nasdaq Composite were on track for a seventh straight weekly fall, the longest streak for each since 2001.

Major retailers this week, such as Walmart WMTand Target TGT reported disappointing profits, against a backdrop of rising expenses and inflation.

Mark Hulbert: Here’s the real reason the stock market is coming unglued — and it isn’t because of weak earnings

This past week has shown that the risk of economic downturn, fears that high inflation is cutting into corporate performance and rising borrowing costs remain the major worry for markets, particularly after Fed Chairman Jerome Powell said the central bank “won’t hesitate” to lift rates beyond neutral to curb high inflation, according to Christian Stocker, lead equity sector strategist at UniCredit Bank in Munich.

“In this environment, investor sentiment is fickle and markets are likely to remain choppy to both sides until there is greater clarity in terms of recession, rates, and geopolitical risks,” Stocker said.

The U.S. economic data calendar is empty for Friday, but next week will bring another round of inflation data, personal consumption expenditure prices excluding food and energy.

Which companies are in focus?

Shares of Ross Stores Inc.
ROST,
-23.55%
slumped around 24% after the retailer became the latest to report disappointing quarterly results and trim its outlook, blaming higher inflation and rising freight and wage costs.

Deere & Co.
DE,
-13.75%
shares slid more than 13% after the agriculture, construction and forestry equipment maker reported better-than-expected fiscal second-quarter profit and revenue.

Applied Materials Inc.
AMAT,
-6.93%
stock was down 7.4% after the chip-equipment maker reported a miss on profit, revenue and forecast amid continued supply chain woes.

Foot Locker
FL,
+4.75%,
the athletic footwear and apparel retailer, saw its shares rise 1.7% after it reported first-quarter profit that beat expectations. 

How are other assets trading?

The yield on the 10-year Treasury note 
TMUBMUSD10Y,
2.799%
fell 7 basis points to 2.79%. Yields and debt prices move opposite each other.

The ICE U.S. Dollar Index 
DXY,
+0.40%
rose 0.3%, but was on track for a 1.5% weekly fall as it pulled back from a roughly 20-year high set last week.

Bitcoin 
BTCUSD,
-4.28%
was off 4.5% at $28,826.

Oil futures fell, with the U.S. benchmark 
CL.1,
+1.04%
edging down 0.3% at around $109.62 a barrel. In gold futures 
GC00,
-0.07%,
gold for June delivery slipped 0.1% to $1,839 an ounce.

In European equities, the Stoxx Europe 600 
SXXP,
+0.73%
 closed 0.7% higher Friday but slipped 0.5% for the week. London’s FTSE 100 
UKX,
+1.19%
ended 1.2% higher Friday and booked a weekly decline of 0.4%.

—-Barbara Kollmeyer contributed to this report.