After gaining for five consecutive trading weeks and closing at fresh record-high price levels, the S&P 500 (SPX-INDEX) started this week on a weaker note and declined as the week progressed. The S&P 500 closed Wednesday almost flat and started Tuesday on a mixed note.
On February 1, ten out 11 major S&P 500 sectors moved lower. Weakness in the utilities and real estate sectors pushed the market lower. On the other hand, strength in the telecom services and energy sectors limited the market losses.
The market sentiment is weak this week amid a decrease in markets’ risk appetite. The rally of Treasury yields amid speculations about rising inflation limited the market gains. On Thursday, the market opened lower amid the release of weaker-than-expected productivity data. According to data released by the Bureau of Labor Statistics, US non-farm productivity declined 0.1% in 4Q17—disappointing compared to the forecasted reading of 0.8% growth. According to the Department of Labor, US initial jobless claims declined to 230,000 last week, which is less than the expected reading of 238,000.
The market is looking forward to the release of January’s non-farm payrolls data and unemployment data scheduled to release at 8:30 AM EST today.
The CBOE Volatility Index (or VIX) measures uncertainty in the market. It remained unchanged at 13.47 on Thursday. The index is measured on a scale of one to 100 with 20 as the historical average. The VIX is also called the “fear index.” Usually, it has an inverse relationship with stocks and rises when the S&P 500 falls.
NASDAQ and Dow
The NASDAQ Composite Index (IXIC) and Dow Jones (DJIA-INDEX) started lower and traded with increased volatility on Thursday. The NASDAQ Composite fell 0.35% on February 1 and closed the day at 7,385.86. The Dow Jones closed the day at 26,186.71—a gain of 0.14%.
Next, we’ll discuss how US Treasury yields and the US dollar performed in the early hours on Friday.