US benchmark equity indexes experienced a downturn on Friday, driven by declines in notable mega-cap stocks that shaped the trading landscape. The Nasdaq Composite fell 1.5%, closing at 19,722, while the S&P 500 saw a drop of 1.1%, ending at 5,970.8. The Dow Jones Industrial Average, a key indicator for the market, lost 0.8% to settle at 42,992.2.
Among sectors, consumer discretionary faced the largest decline, with energy prices remaining relatively stable. It's important to note that no sector posted a gain on this day, which might indicate a potential shift in market dynamics. A closer examination of individual stocks reveals that Nvidia, a titan in the chip-making industry, experienced a sharp decline of 2.1%.
This decline marked it as the most significant detractor on the Dow. Leading technology companies, including Microsoft and Apple, were also among the poor performers, alongside e-commerce powerhouse Amazon.com and retail giant Walmart. Within the same time frame, electric vehicle manufacturer Tesla suffered the most major drop on the Nasdaq, registering a notable decrease of 5%, and was the second largest decline on the S&P 500 for the day. Despite these fluctuations, the broader market has shown resilience this year.
The Nasdaq has achieved an impressive gain of 31% year-to-date, while the S&P 500 has risen 25%. The Dow also reflected a positive trend, climbing 14%. In stark contrast to the recent downturn in mega-cap stocks, investor sentiment remains buoyed as we approach 2025. D.A. Davidson, in a Friday note to clients, highlighted that investor optimism is building as several positive trends from 2024 continue to solidify.
The outcomes of the November US presidential election have fueled expectations for pro-growth policies, setting the stage for equity prices to potentially soar. To sustain this progress, the firm emphasized the necessity for the US economy to maintain growth above 2%, coupled with corporate earnings expanding beyond 10%. On the fixed income front, the US 10-year yield experienced a rise of 5.2 basis points, reaching 4.63%, while the two-year rate stayed relatively stable at 4.33%.
These movements are indicative of the changing economic landscape that investors must navigate. In corporate developments, Lamb Weston has seen shareholder Jana Partners nominate Jeff Delapp as part of their slate of candidates aimed at potentially overhauling the board of this leading frozen potato products supplier.
Following this announcement, Lamb Weston shares increased by 2.6%, marking it as the top performer on the S&P 500 for the day. Furthermore, health insurance giant UnitedHealth Group and Amedisys have agreed to prolong their merger discussions as the deal undergoes scrutiny by the US Department of Justice due to competitive concerns.
As a consequence, Amedisys shares surged by 4.7%, whereas UnitedHealth observed a minor decline of 0.2%. On the commodities front, West Texas Intermediate crude oil saw a modest increase of 0.8%, reaching $70.21 a barrel. Recent government data indicated that commercial crude stockpiles in the US experienced a decline larger than projected, and the number of oil rigs remained steady at 483. In the metals market, gold prices fell by 0.8%, settling at $2,632.60 per troy ounce, while silver saw a decline of 1.5%, priced at $29.94 per ounce.
As the year wraps up, investors are likely to remain vigilant, assessing these market movements while preparing for new opportunities in 2025..