On Friday, US benchmark stock indexes faced a downturn around midday, with the tech-heavy Nasdaq experiencing the most significant losses as notable companies in the sector succumbed to declines. The Nasdaq composite index fell 2.2% to settle at 19,589.5, heavily influenced by the retreat of electric vehicle manufacturer Tesla, which dropped 4.5%, and chipmaker Nvidia, seeing a decrease of 3%.
These downturns positioned Tesla and Nvidia as some of the largest decliners on the exchange. The S&P 500 index followed suit, sliding 1.7% to 5,937.1, and the Dow Jones Industrial Average recorded a loss of 1.2%, closing at 42,799.7. All major sectors were down as trading progressed, with consumer discretionary and communication services emerging as the most affected divisions apart from the technology sector. In economic updates, newly released data from the US Census Bureau indicated that the US advance international trade in goods deficit expanded to $102.86 billion in November, a jump from October's $98.26 billion.
This shortfall exceeded the $101.2 billion deficit that a Bloomberg survey had anticipated. Exports saw a 4.4% increase in October, while imports experienced a rise of 4.5%. Further analysis of the same report highlighted a decrease in wholesale inventories of 0.2% in November after a slight increase of 0.1% in October.
However, analysts surveyed by Bloomberg had predicted a modest rise of 0.1%. Retail inventories, on the other hand, grew by 0.3% in November, aligning with expectations, following a previous increase of 0.2%. Notably, after accounting for a 0.4% drop in motor vehicle inventories, retail inventories indicated an overall increase of 0.6% for the month. As part of its market outlook for 2025, D.A.
Davidson expressed a more optimistic view, suggesting that weak economic conditions were not anticipated as the new year approaches, potentially allowing equities to record gains. However, the firm cautioned investors to prepare for market volatility and reminded them that corrections in equity markets are commonplace.
"We continue to recommend broad sector diversification and frequent portfolio rebalancing," stated D.A. Davidson. In corporate news, OpenAI, which is backed by Microsoft, is reportedly considering a reorganization to establish itself as a Delaware public benefit corporation. This move aims to facilitate the raising of traditional capital while retaining a nonprofit division, as detailed in an OpenAI blog post on Thursday.
In reaction to the news, Microsoft shares declined by 2.6% in trading on Friday without any immediate comment from the company. Additionally, a filing revealed that UnitedHealth Group and Amedisys have decided to extend the deadline for finalizing their $3.3 billion merger amidst scrutiny from the US Department of Justice.
While shares of Amedisys climbed by 4.7%, those of UnitedHealth fell by 0.5% during the same trading session. In the bond market, the yield on the US 10-year Treasury increased by 2.6 basis points to reach 4.61%, whereas the two-year yield dropped by 1.8 basis points to 4.31%. On the international front, the US Dollar Index exhibited little change, remaining at 108.11, while West Texas Intermediate crude oil prices rose by 0.8% to $70.14 per barrel.
Gold futures saw a slight decrease, falling 0.9% to settle at $2,630.70 per ounce, and silver prices dropped by 1.5% to $29.93 per ounce..