U.S. stocks fell Friday with the S&P 500 on pace for the worst month since March 2020, as Amazon became the latest victim in the technology-led sell-off.
The S&P 500 retreated by 1.5%, weighed down by Amazon’s post-earnings plunge. The tech-heavy Nasdaq Composite fell 1.5%. The Dow Jones Industrial Average shed about 380 points, or 1.1%.
Stocks were set to close out a dismal month as investors have contended with a slew of headwinds, from the Federal Reserve’s monetary tightening, rising rates, persistent inflation, Covid case spikes in China and the ongoing war in Ukraine.
The S&P 500 is down about 6%, on pace for its worst monthly performance since the onset of the Covid pandemic. The Nasdaq is down around 10%, also its worst month since March 2020. The Dow is off by roughly 3% for the month.
Technology stocks have been the epicenter of the April sell-off as high interest rates hurt valuations, and supply chain issues stemming from Covid and the war in Ukraine disrupt business.
Amazon on Friday sunk about 11.8% — its biggest drop in roughly a decade — after the e-commerce giant reported a surprise loss and issued weak revenue guidance for the second quarter.
Apple shares kept the market at bay, marginally even after management said supply chain constraints could hinder fiscal third-quarter revenue. The stock was down in the premarket, but analysts said to buy the dip.
“The current market performance is threatening to make a transition from a longish and painful ‘correction’ to something more troubling,” Marketfield Asset Management Chairman Michael Shaoul wrote.
“March 2020 for instance saw very sharp declines, but equally fast recoveries. The current episode looks much more likely to impose long lasting losses in investors that piled in during the 2021 rally, and is best thought of a ‘creeping bear market,’ that is steadily widening its net over prior market leadership,” Shaoul added.
The Nasdaq Composite sits in bear market territory, about 21% below its intraday high. The S&P 500 is off its record by more than 11% and the Dow is around 8% lower.
Friday wraps up one of the busiest weeks for the first-quarter earnings season and a particularly intense one for tech companies, which have driven investor sentiment throughout the week.
Intel also reported earnings Thursday evening. The stock fell 5% after the company issued weak guidance for its fiscal second quarter.
Shares of Robinhood rose more than 2%, even after the company reported a wider-than-expected loss, shrinking revenue and a decrease in monthly active users.
About 80% of S&P 500 companies have beat quarterly earnings expectations, with about half of the index’s members having reported results so far, according to FactSet.
“Despite what we view as a solid overall earnings period so far, the positive results look to be getting overshadowed by some of the broader concerns related to inflation and the Fed,” BMO’s Brian Belski said in a note to clients.
A hot inflation reading Friday underscored the difficult environment. The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — rose 5.2% from a year ago.