Stock Retreats As Bond Yields Climb Amid Oil Concerns, UAW Strike: What’s Driving Markets Friday? – SPDR Select Sector Fund – Health Care (ARCA:XLV), SPDR Select Sector Fund – Consumer Discretionary (ARCA:XLY), Ford Motor (NYSE:F), General Motors (NYSE:GM)

Risk appetite saw a setback during the final session of the week as stock markets dipped in response to a renewed surge in inflationary pressures. Oil prices made a notable climb, with the WTI benchmark rising to $90 per barrel.

The strike launched by the United Auto Workers union against the major Detroit automakers — Ford Motor Co. F, Stellantis N.V. STLA and General Motors Co. GM — has raised concerns about the potential for broader wage increases given the ongoing strength of the economy.

President Joe Biden emphasized the need for improved treatment of workers, recognizing their exceptional skills and sacrifices in recent years and advocating for a fairer distribution of profits.

Furthermore, the uptick in Treasury yields added to the dampening effect on risk sentiment. The 10-year yield edged up to 4.33%, inching closer to the August peak of 4.35%, last observed in November 2007.

Cues From Friday’s Trading:

The S&P 500 fell 1%, while the tech-heavy Nasdaq 100 dropped even further, by 1.3%. The S&P is still up by a marginal 0.2% for the week, while the Nasdaq is flipping to losses.

Blue chips in the Dow Jones fared better, but were still 0.5% lower for the day. The Dow managed to rise 0.4% for the week.

Small caps fell 1.2% on Friday and 0.4% for the week

US Index Performance On Friday

Friday’s Trading In Major US Equity ETFs

• The SPDR S&P 500 ETF Trust SPY was 1.2% lower to $444.94.
• The SPDR Dow Jones Industrial Average ETF DIA fell 0.9% to $347. 
• The Invesco QQQ Trust QQQ fell 1.4% to $372, according to Benzinga Pro data.

Looking at S&P 500 sector ETFs:

• The Health Care Select Sector SPDR Fund XLV fell 0.2%, managing to outperform other sectors.
• The Technology Select Sector SPDR Fund XLK was the laggard, down 1.6%, followed by the the Consumer Discretionary Select Sector SPDR Fund XLY, down 1.3%.

Latest Economic Data:

The University of Michigan’s U.S. consumer sentiment index declined from 69.5 to 67.7 in September, falling short of expectations of 69.1. The index for current economic conditions dropped from 75.7 to 69.8 during this period. Future expectations improved from 65.5 to 66.3. Year-ahead inflation expectations also decreased from 3.5% to 3.1%, reaching their lowest level since March 2021, reflecting consumer anticipation of reduced inflationary pressures.

Stocks In Focus:

• Adobe, Inc. ADBE fell over 4% following the release of its quarterly results.
• Apellis Pharmaceuticals APLS rose 7%, after Wells Fargo upgraded the company.
• Planet Fitness Inc PLTN 13% hit a three-year low after the gym operator announced that Chief Executive Chris Rondeau had stepped down from his role.

Commodities, Bonds, Other Global Equity Markets:

Crude oil fell 0.3%, with a barrel of WTI-grade crude trading at $89.90. The United States Oil Fund ETF USO was 0.2% lower to $80.98.  

Treasury yields were slightly higher, with the 10-year yield up by 3 basis points to 4.33% and the two-year yield up by 3 basis points to 5.03%. The iShares 20+ Year Treasury Bond ETF TLT was 0.3% lower for the day. 

The dollar eased, with the U.S. dollar index, which is tracked by the Invesco DB USD Index Bullish Fund ETF UUP, down 0.2%. The EUR/USD pair, which is tracked by the Invesco CurrecyShares Euro Currency Trust FXE, was 0.3% higher to 1.0670.

European equity indices had a mixed session. The SPDR DJ Euro STOXX 50 ETF  FEZ was flat for the day.

Gold rallied 0.8% to $1,925/oz, while silver rose 2.1% to $23.08. Bitcoin BTC/USD was 0.6% lower to $26,364.

Staff writer Piero Cingari updated this report midday Friday. 

Photo via Shutterstock.