Stocks tumbled on Friday as Wall Street’s summer rally faltered and rate hike fears resurfaced, leading the major averages to end the week on a sour note.
The S&P 500 slid 1.29% to close at 4,228.48, while the Dow Jones Industrial Average tumbled 292.30 points, or 0.86%, to 33,706.74. The Nasdaq Composite dropped 2.01% to settle at 12,705.22.
For the week, the S&P edged 1.21% lower, while the Dow slipped 0.16%. The tech-heavy Nasdaq closed out the week down 2.62%.
Friday’s halt in Wall Street’s summer rally came as minutes from the Federal Reserve’s July meeting and comments from St. Louis Federal Reserve President James Bullard indicated that the central bank would likely continue hiking rates in the near term, putting a damper on investors’ hopes of a slowdown.
Despite the week’s moves, many investors and traders are holding out hope for a bounce back.
“I wouldn’t expect a complete reversal going back to the June lows or something like that, however, the choppiness we’re seeing today and this week does reflect a lot of the bear case that’s out there,” said FBB Capital Partners’ Mike Bailey. “I think seeing the market trade sideways or seeing a bit of a pause in that rally definitely makes sense based on some of the facts that we’re seeing out there.”
Meanwhile, Bed Bath & Beyond shares cratered more than 40% after Ryan Cohen dumped his entire stake in the retailer. The move seemed to dampen sentiment among meme stock traders who have bet big on the company in recent months.
In other news, about a $2 trillion notional value worth of options contracts expired on Friday. Options expirations can add volatility to markets as some holders may be forced to move into their positions.