Sept 17 Reuters -- U.S. stock indexes slipped on Friday, led by major technology firms, while sentiment weighed on sentiment over higher corporate taxes and an upcoming Federal Reserve Meeting.
The Nasdaq was the worst performer among the main U.S. indexes and was set for its worst day since late July as a batch of weak economic readings encouraged investors to pivot into economically sensitive sectors and out of tech this week.
It was a volatile week and a return to value outperformance as buy the dip sentiments took hold, but not enough to rescind recent market weakness, said Louise Dudley, international equities portfolio manager at Federated Hermes.
The three major indexes are now headed for weekly losses, with the S&P 500 heading for its worst 2 week performance since late February.
Concerns that a potential hike in corporate taxes could eat into earnings also weighed on markets, as leading Democrats sought to raise the top tax rate for corporations to 26.5% from the current 21%.
We anticipate large cap volatility as changes to U.S. corporate tax rates play a role going forward as the two sides negotiate, particularly for the 'low tax' sectors involved such as tech and biotech, and companies with high international revenues, Dudley said.
Focus is now on a meeting of the Federal Reserve next week, with investors debating if a batch of weak economic data this week could spur the bank into shortening its timeline for reducing monetary stimulus.
Wednesday data showed an unexpected rise in retail sales on the heels of a stable factory activity reading and a cooling in inflation suggesting the U.S. economic recovery was resilient despite a recent rise in cases of Delta COVID-19 variants.
Treasury yields also rose on the data, indicating increased optimism over the economy as investors sold safe-haven bonds.
ET, the Dow Jones Industrial Average fell 168.97 points, or 0.49% to 34,580. 72, the S&P 500 loss 31.57 points, or 0.71 to 4,442 - 1. 18 and Nasdaq composite lost 146.08 points, or 0.96 to 15,035, or 28,011,985. Analysts said the S&P 500 was trading close to its 50-day moving average, which tends to be a strong support for the index. On Thursday, those losses could lead to a rebound next week.
The simultaneous expiration of stock options, stock index futures and index options contracts later in the day, known as triple witching, is also expected to cause volatility during the trading session.
Among other movers, vaccine makers Moderna and Pfizer fell amid an ongoing debate over whether Americans should receive a booster dose of the Pfizer BioNTech COVID - 19 vaccine.
Declining issues outnumbered advancers by a 2 - to - 1 ratio on the Nasdaq and by about a 1.4-to-1 ratio on the NYSE.
The S&P 500 reveals 7 new 52 week highs and 2 new lows, while the Nasdaq is on record with new highs and 60 new lows.