Stocks fall; S&P 500 has its worst week since February

Stocks sank again on Wall Street on Friday, knocking the Standard & Poor’s 500 to its worst weekly loss since February, as more steam came out of banks and other stocks that soared earlier this year with expectations for the economy and inflation.

The S&P 500 fell 55.41 points, or 1.3%, to 4,166.45 in a widespread slump. It was the worst day for the index in a month as unease grows about the Federal Reserve making plans to eventually offer less help to markets.

The Dow Jones industrial average lost 533.37 points, or 1.6%, to 33,290.08, and the Nasdaq composite fell 130.97 points, or 0.9%, to 14,030.38.

Investors are still recalibrating their moves after the Federal Reserve’s signal this week that it may raise shortterm interest rates twice by late 2023, earlier than expected. The Fed also began talks about slowing its bond-buying program that’s helping to keep longer-term rates low. On Friday, St. Louis Federal Reserve President James Bullard said on CNBC that his personal prediction was that the first rate increase may come as soon as next year.

All the major U.S. stock indexes remain relatively close to their record highs, as the economy continues to leap out of the pandemicspurred recession. The S&P 500 is only about 2% below its all-time high set Monday, and the Dow is within 5% of its record set last month.

Banks are taking a hit from the shrinking gap between shorter- and longerterm interest rates, which helped send financial stocks in the S&P 500 down 2.4% on Friday. That was one of the sharpest losses among the 11 sectors in the index.

The 10-year Treasury yield, which is less directly affected by Fed moves, ended the week close to where it started, though there were some jagged moves up and down in the interim. It sat at 1.43% on Friday afternoon, down from 1.51% late Thursday but not far off from its 1.46% level a week earlier.

The rate pressure helped send JPMorgan Chase down 2.5%, and it was one of the heaviest weights on the S&P 500. Bank of America dropped 2.6%.

Among the few winners in the market Friday was software maker Adobe. It rose 2.6% after reporting stronger results for the latest quarter than analysts expected and gave an encouraging forecast for the current quarter.