U.S. Stocks Remain Sharply Lower After Morning Pullback

(RTTNews) - Stocks came under pressure over the course of morning trading on Friday and continue to see substantial weakness in the afternoon. With the downturn on the day, the major averages are partly offsetting the strong gains posted in the previous session.

The major averages have moved roughly sideways in recent trading, lingering near their worst levels of the day. The Dow is down 314.21 points or 1.1 percent at 29,724.51, the Nasdaq is down 253.62 points or 2.4 percent at 10,395.53 and the S&P 500 is down 69.33 points or 1.9 percent at 3,600.58.

The sharp pullback on Wall Street extends the volatility seen in the previous session, when stocks recovered from an early sell-off to close sharply higher.

Renewed selling pressure was generated in reaction to a report from the University of Michigan showing a rebound in inflation expectations in the month of October.

One-year inflation expectations climbed to 5.1 in October after dropping to a one-year low of 4.7 in September, while five-year inflation expectations increased to 2.9 percent in October after falling to 2.7 percent in September.

"Last month, long run inflation expectations fell below the narrow 2.9-3.1% range for the first time since July 2021, but since then expectations have returned to that range at 2.9%," said Surveys of Consumers Director Joanne Hsu.

The data has led to renewed inflation concerns after optimism inflation has peaked contributed to the substantial turnaround on Thursday.

"Wall Street can't seem to get a handle on how high the Fed will have to take rates," said Edward Moya, senior market analyst at OANDA.

He added, "Last week, traders were growing confident that we would just see 125bp more in rate hikes this year, now it seems like we could see 150 this year and also another one or two 25 bps rate increases next year."

Meanwhile, traders are also reacting to earnings news from several big-name financial companies, with JPMorgan Chase (JPM) posting a strong gain after reporting third quarter results that beat analyst estimates on both the top and bottom lines.

Shares of Wells Fargo (WFC) have also shown a significant move to upside after the company reported better than expected third quarter revenues.

On the other hand, shares of Morgan Stanley (MS) have moved notably after the investment bank reported third quarter results that missed analyst estimates.

Sector News

Gold stocks continue to see substantial weakness in afternoon trading, resulting in a 4.1 percent nosedive by the NYSE Arca Gold Bugs Index.

The sell-off by gold stocks comes amid a notable decrease by the price of the precious metal, with gold for December delivery slumping $27.10 to $1,649.90 an ounce.

Significant weakness also remains visible among steel stocks, as reflected by the 3.7 percent plunge by the NYSE Arca Steel Index.

Semiconductor stocks have also shown a considerable move to the downside on the day, dragging the Philadelphia Semiconductor Index down by 3.4 percent.

Energy, chemical and brokerage stocks are also seeing notable weakness, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan's Nikkei 225 Index soared by 3.3 percent, while China's Shanghai Composite Index shot up by 1.8 percent.

The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index inched up by 0.1 percent, the German DAX Index climbed by 0.7 percent and the French CAC 40 Index advanced by 0.9 percent.

In the bond market, treasuries have moved lower over the course of the session after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 7.5 basis points at 4.027 percent.