Traders on the floor of the NYSE, May 8, 2023.
Source: NYSE
The S&P 500 was little changed on Friday afternoon as the stock market neared the end of a week with steep losses.
The broader market index slipped 0.1%, while the Nasdaq Composite was near flat. The Dow Jones Industrial Average lost 63 points, or 0.2%.
Ford climbed more than 2% after a source told CNBC that the auto giant was making progress in negotiations with the striking United Auto Workers union. Stellantis also traded higher, while General Motors slipped.
Those moves follow a three-day losing streak for the major averages. The losses came as investors reacted to a signal from the Federal Reserve that it intended to keep interest rates higher for longer.
The S&P 500 and the technology-heavy Nasdaq Composite are down 2.3% and 2.9% this week, respectively. It would mark the third straight negative week and worst weekly performance since March for each. The blue-chip Dow dipped 1.5% on the week.
Bond yields surged after the central bank forecast one more rate hike for 2023. The benchmark 10-year Treasury yield popped to hit a its highest level since 2007 this week. Meanwhile, the 2-year rate touched its highest level since 2006.
“That’s starting to raise some eyebrows for investors,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “Investors are getting used to these higher rate levels and what that means for risk assets going forward.”
Concern also grew around a government shutdown, which could dent consumer confidence and slow down the economy further. House Republican leaders sent the chamber into recess on Thursday.
“Investors are staring at the ground right now worried about a shutdown,” said Jamie Cox, managing partner at Harris Financial. “Markets are just sort of waiting around to see when it happens, and then trying to discount the duration of it.”
