Stocks tumble on Friday, Nasdaq snaps eight-week winning streak: Live updates – CNBC

Stocks ended lower on Friday, with Wall Street posting a losing week.

The Dow Jones Industrial Average fell 219.28 points, or 0.65%, to 33,727.43. The S&P 500 slid 0.77% to 4,348.33, while the Nasdaq Composite was lower by 1.01% to 13,492.52.

— Sarah Min

Art Hogan, chief market strategist at B. Riley Wealth Management, says it’s “not at all surprising” for markets to take a breather this week as investors digest hawkish commentary from Federal Reserve Chair Jerome Powell.

“To the extent that in a very short period of time, the Nasdaq 100, and the Nasdaq Composite and the S&P 500 went from being overbought on the RSI to being back inside the normal range, I think we’ve done a pretty good job of stabilizing a bit,” said Hogan.

“I wouldn’t be surprised if next week is more of the same,” he added.

— Sarah Min

The annual Russell reconstitution rules go into effect after the close on Friday, and it will cause changes in the index followed by many large funds, such as the Vanguard Russell 1000 Growth ETF (VONG).

Stocks are determined to be growth or value by using a book to price valuation, as well as one backward looking growth metric and one forward looking growth metric, said Catherine Yoshimoto, director of product management for the Russell US Indexes. Some stocks appear partially in both growth and value indexes to help reduce turnover.

“About 35% of the Russell 1000 float-adjusted market cap is purely growth, 35% is purely value. And then 30% in the middle shares characteristics of growth and value,” Yoshimoto said.

The changes are based on market data as of April 28. Here are some of the key statistics from the reconstituted indexes.

• The break point between large and small cap stocks is now $4.2 billion, down from $4.6 billion last year. There are some exceptions due to a process FTSE Russell calls “banding”
• Technology is now 50% of the Russell 1000 Growth Index, up from 46.3% last year
• Two notable partial additions to Russell 1000 Value: Nike and Union Pacific, which are now 47% and 57% categorized as value. Both were fully in the growth index last year.
• Alphabet and Meta Platforms are now 100% in the growth index. The stocks were categorized as 13% and 78% value, respectively, last year.
• Dell Technologies was one of the stocks deleted from Russell indexes due to new rules around stockholder voting rights.

— Jesse Pound

With second-quarter earnings season just a couple of weeks away, analysts are placing their bets on which parts of the market are looking the best now.

Among S&P 500 sectors, those with the highest level of buy ratings are energy (64%), communication services (62%) and information technology (60%), according to John Butters, senior earnings analyst at FactSet.

Sectors with the lowest level are utilities and materials with 49% each, followed by consumer staples with 44%. Staples also has the highest proportion of sell ratings at 10%.

—Jeff Cox

Apple was higher Friday afternoon, managing to hit new all-time highs even as the major averages declined. Shares were last up by 0.1%.

— Sarah Min, Scott Schnipper

The 2023 market rally and expectation-defying U.S. economy have come with the background of a deeply inverted yield curve. The 2-year Treasury yield has now traded above the 10-year yield for almost a full year.

However, history shows that the recession-predictive powers of an inverted yield curve can take a while to come to fruition. In a note to clients on Thursday, Strategas strategist Chris Verrone compared the current period 1979 and 2007, when bear market rallies flamed out and the economy fell into a recession.

Read more about the yield curve’s history on CNBC Pro.

— Jesse Pound

When it comes to meetings, the Federal Reserve likes to stick to a schedule: Eight two-day meetings a year, six weeks apart except on two occasions, always on Tuesday and Wednesday, with minutes to be released three weeks after the meetings.

In 2024, though, there’s a little matter that’s going to get in the way of that for the November session.

The presidential election, to be held Nov. 5, is forcing the central bank to push its meeting to Nov. 6-7, meaning a rare Wednesday-Thursday gathering. The Fed has done so in other years when there have been conflicts with elections, primarily so that staff members and officials traveling from other districts don’t have to vote via absentee ballot.

Here’s the full-year schedule: Jan. 30-31, March 19-20, April 30-May 1, June 11-12, July 30-31, Sept. 17-18, Nov. 6-7, Dec. 17-18. The first meeting of 2025 will be held Jan. 28-29.

—Jeff Cox

These are the stocks making the biggest moves during Friday’s trading session:

Starbucks — Starbucks shares lost nearly 3% after a union representing workers said strikes are slated to begin Friday in response to claims that its not allowing Pride decorations at cafes.

CarMax — The used car retailer popped 8.8% after beating the consensus estimate of analysts for its first-quarter revenue. CarMax posted $7.69 billion, higher than the $7.49 billion anticipated by analysts polled by StreetAccount.

Virgin Galactic — Virgin Galactic shed 18% after announcing a $300 million capital raise via a common stock offering. The space tourism company also said it plans to raise an additional $400 million to grow its fleet of spacecrafts.

Read the full list of stocks moving midday here.

— Samantha Subin

Bank of America is growing increasingly confident in GitLab‘s ability to harness artificial intelligence to to disrupt the development, security, and operation enterprise space.

“Version 16 incorporates new AI features, improved user experience, new security and compliance capabilities, and the ability to extend the platform to data science teams,” wrote Koji Ikeda in a Thursday note, on the heels of a launch webinar from the source code management software company.

“We believe GitLab is continuing its journey of becoming a category leading AI-powered enterprise DevSecOps platform,” the analyst added.

Ikeda retained a buy rating and $55 price target on shares, implying 11% upside from Thursday’s close. Shares have added about 9% in 2023.

— Samantha Subin

Health care and consumer discretionary stocks have been able to avoid the S&P 500‘s more than 1% slide this week.

Both sectors in the S&P 500 are up 0.4% on the week. UnitedHealth and Merck & Co. led the health stocks up with advances of more than 5% and 4%, respectively. CarMax helped pull the consumer discretionary sector up with a nearly 6% jump on the week.

The other nine S&P 500 sectors traded down on a week-to-date basis. Energy and real estate were the two worst performing sectors, with each dropping more than 3%.

— Alex Harring

Stocks declining in the New York Stock Exchange outnumbered advancers 2.1 to 1 in midday trading.

— Sarah Min

Goldman Sachs is remaining bullish on MongoDB coming out of its investor session and is optimistic about how artificial intelligence can benefit the data developer platform.

“We came away from MongoDB’s investor session with more clarity on its AI product roadmap, which we expect to be accretive to Atlas,” analyst Kash Rangan wrote in a note to clients Thursday. (Atlas is the name of the company’s cloud database.)

In addition to reiterating his rating, Rangan raised his price target to $440 per share. His target implies shares could rally about 13.3% from where they finished Thursday’s session.

— Alex Harring

A slew of homebuilding stocks notched fresh all-time highs during Friday’s trading session. That includes D.R. Horton, last trading at a level not seen since its June 1992’s initial public offering. NVR and PulteGroup last traded near levels dating back to 1993 and 1972, respectively.

These names also hit fresh highs:

These are the stocks hitting new lows:

— Samantha Subin

Roth MKM analyst Rohit Kulkarni hiked estimates for Meta Platforms, saying that the company’s traditional advertising business is showing signs of strength.

“Our industry and channel checks hint at continued improvement in META’s ad engine along with likely incremental ad allocations returning from TikTok over the past six months,” the note said.

Kulkarni also hiked the price target on Meta to $315 per share from $255. The stock closed at just under $285 per share on Thursday.

— Jesse Pound

Manufacturing activity in the U.S. slowed more than expected in June, according to an S&P flash PMI reading released Friday that was the lowest in six months.

The index registered a 46.3, down from the 48.4 in May and below the 49.0 Dow Jones estimate. As the reading measures the level of companies reporting expansion, anything below 50 represents contraction.

On the services side, the reading of 54.1 was a two-month low and below the 54.9 in May. The composite index came in at 53.0, below the 54.3 from the previous month but still showing expansion even though it was a three-month low.

—Jeff Cox

Stocks fell to start Friday’s session.

The Dow Jones Industrial Average dropped 247 points, or 0.75%. The S&P 500 is lower by 0.85%, while the Nasdaq Composite fell 1.04%.

— Sarah Min

Barclays strategist Venu Krishna warned that, while “the primary beneficiaries of AI have the potential to grow into their valuations, the same cannot be said for the broader Tech sector which appears frothy.”

The S&P 500 tech sector has outperformed this year, rallying nearly 40%. The tech-heavy Nasdaq Composite, meanwhile is up 30%.

Krishna also noted that, “Our basket of AI-exposed stocks in the US is up over 50% YTD and has pulled the broader Tech sector along with it, whereas the rest of the SPX (ex-AI, ex-Tech) is actually flat over the same time frame.”

“Will the new AI wave lead to long-term structural expansion of corporate profit margins to justify the valuations of the broader market?”

— Fred Imbert, Michael Bloom

Data center stock Equinix could stand to benefit from an artificial intelligence play, according to Bank of America.

BofA upgraded Equinix stock on Friday after positive takeaways from the company’s investor day.

“EQIX remains our top data center pick as a function of its strong balance sheet, demonstrable pricing power, and position as a call option on the emerging incremental AI demand opportunity,” analyst David Barden said.

CNBC Pro subscribers can read the full story here.

— Brian Evans

Health care providers are on pace for a winning week, bucking the trend in the major averages. As of Thursday’s close, the iShares Healthcare Providers ETF (IHF) is up by almost 1.8%, and is headed for its third positive week in four.

Among the names bolstering the ETF is Cano Health, DocGo, Acadia Healthcare Company, UnitedHealth Group and more.

— Sarah Min, Gina Francolla