The major averages opened higher, but slumped into the close, capping off a volatile week of trading, a day after posting a historic turnaround rally as investors digested inflation expectations. The Dow Jones Industrial Average fell 403 points, or 1.34%, to end the day at 29,634. The S&P 500 shed 2.37% or 86 points to 3,583, notching its seventh negative close in eight days. The Nasdaq Composite slipped 3.08% or 327 points to end the day at 10,321, weighed down by losses in Tesla and Lucid Motors, which declined 7.55% and 8.61%, respectively.
The Dow Jones rallied on the week closing up 1.15%. Both the S&P 500 and the Nasdaq ended the week lower, falling 1.55% and 3.11%, respectively.
Stocks fell to session lows after a consumer survey from the University of Michigan showed inflation expectations were increasing, a sentiment that the Federal Reserve is likely watching closely. The tech-heavy Nasdaq led declines as growth companies are most sensitive to interest rate hikes.
At the same time, bond yields spiked, with the rate on the 10-year U.S. Treasury topping 4% for the second time in two days as investors react to higher inflation expectations.
Markets whipsawed throughout the week as investors weighed new inflation data that will inform the Fed as it continues to hike interest rates to cool off price increases. On Thursday, stocks staged a major turnaround. The Dow ended Thursday's session up 827 points after being down more than 500 points at the intraday low. The S&P 500 rose 2.6% to break a six-day losing streak, and the Nasdaq Composite jumped 2.2%.
Thursday marked the fifth largest intraday reversal from a low in the history of the S&P 500, and it was the fourth largest for the Nasdaq, according to SentimenTrader.
The moves followed the release of the consumer price index, a key U.S. inflation reading that came in hotter than expected for the month of September. Initially, this weighed on markets as investors braced themselves for the Federal Reserve to continue with its aggressive rate-hiking plan. Later, however, they shrugged off those worries.
Still, persistent inflation remains a problem for the Fed and for investors' worries around the central bank's policy tightening.
Oil slumps as recession fears outweigh production cuts
Oil prices fell Friday, pushing the commodity to its worst week since Aug. 5 as worries about a global recession hitting demand outweighed production cuts from OPEC+.
West Texas Intermediate crude settled down 3.93% at $85.61 per barrel on Friday. That brought it down 7.59% for the week, its first negative one in three. Year to date, West Texas Intermediate is up nearly 14%.
Brent crude also slumped, falling 3.11% to $91.63 per barrel Friday, notching a 6.42% loss for the week. It's Brent's first negative week since Sept. 2. The commodity is up nearly 18% year to date.
Albertsons, banks stocks and Delta among Friday's stocks making the biggest moves
Bank stocks and grocery store chain operator Albertsons were among the names making headlines in midday trading on Friday.
Shares of Safeway owner Albertsons dropped 8% after Kroger agreed to purchase the company in a deal valued at $24.6 billion, or $34.10 a share, while Kroger's stock dipped 4.8%.
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