Stock Market Today (8/19/22): Nasdaq, S&P Snap Weekly Win Streaks as Tech Slumps – Kiplinger's Personal Finance

Getty Images
Tech stocks led the broader market lower Friday, as government-bond yields spiked after a pair of Federal Reserve officials weighed in on rate hikes.
The 10-year Treasury yield jumped as high as 2.998% – its loftiest level since late July – before ending up 9.4 basis points at 2.974%. (A basis point is one-one hundredth of a percentage point.)  
This came after St. Louis Fed President James Bullard – a current voting member of the Federal Open Market Committee (FOMC) – said in an interview with The Wall Street Journal Thursday that he "would lean toward [raising rates] the 75 basis points" at the central bank's September meeting. "I think we've got relatively good reads on the economy, and we've got very high inflation, so I think it would make sense to continue to get the policy rate higher and into restrictive territory," Bullard added.
And this morning, Richmond Fed President Thomas Barkin said at an event in Maryland that the central bank "will do what it takes" to get inflation back down to its 2% target. Barkin is not a voting member of the FOMC this year.
Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.
Monthly options also played a part in today's volatile price action. Options expiration activity can increase liquidity in the market, says Souhow Yao, analyst at Susquehanna Financial Group, and can exacerbate price moves in the underlying stocks or indexes. Today, over $2 trillion worth of options contracts expired. 
Technology (-1.8%) was one of the weaker sectors in today's selloff, dragging the Nasdaq Composite down 2.0% to 12,705. The S&P 500 Index finished 1.3% lower at 4,228, and the Dow Jones Industrial Average gave back 0.9% to 33,706. All three indexes closed lower on the week, with the Nasdaq and S&P 500 snapping their weekly win streaks.
Other news in the stock market today:
Wall Street could get more color on the Fed's monetary policy outlook next week, with the central bank hosting its annual Jackson Hole symposium. "A major source of friction between the market and central bank communications has been around the issue of how long rates will need to stay relatively high to corral inflation," says Douglas Porter, chief economist at BMO Capital Markets. "Next week's headline event may focus on this very issue," he adds. "This year's theme for the symposium is 'Reassessing Constraints on the Economy and Policy.' Sustained strength in underlying inflation would be a meaningful constraint on both the economy and the room to maneuver for policy." 
So what does this mean for investors? Well, it might be a good time to do a portfolio check, making sure it's positioned for continued inflation, additional rate hikes and more volatility in the market. Does it include dividend stocks? Is there exposure to companies with pricing power or healthcare stocks, both of which are considered inflation hedges? Investors looking for broader protection might want to consider these defensive ETFs. The funds featured here use a variety of strategies but share the same goal: providing stability against the macro-headwinds still impacting markets. 
Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site
© Future US LLC, 10th floor, 1100 13th Street NW, Washington, DC 20005. All rights reserved.


Leave a Reply

Your email address will not be published.