S&P 500 Cuts Some Losses, But Still Set for Biggest H1 Loss in Decades By

© Reuters

By Yasin Ebrahim

-- The S&P 500 cut some losses Thursday, but remained on course for its worst first-half performance in decades as worries about a recession mount in the wake of Federal Reserve rate hikes to combat surging inflation.

The S&P 500 fell 0.95% on pace for its biggest first-half loss since 1970. The Dow Jones Industrial Average slipped 0.9%, or 287 points and the Nasdaq was down 1.3%.

Energy led the broader market lower under pressure from falling oil prices after OPEC and its allies including Russia, or OPEC+, said they would stick with the previously announced output plan, resisting calls to step up the pace of production.

Following two days of meetings, OPEC+ said they would increase monthly overall production for the month of August to 648,000 barrels per day, unchanged from a prior agreement earlier this month. 

Coterra Energy (NYSE:CTRA), APA (NASDAQ:APA), and Exxon Mobil (NYSE:XOM) were among the biggest decliners falling about 3%

Tech stocks cut some losses, but remained a big drag on the broader market even as Treasury yields slipped after fresh signs that economic growth is slowing.

The 10-year Treasury yield slipped below 3% after data showing consumer spending is less robust than many believe, stoked recession fears and offset a slower than expected rise in inflation.

Consumer spending rose by 0.2% in May, short of forecasts for a 0.4% rise, while April’s figure was revised down to 0.6% growth from 0.9% previously.

As the consumer makes up about 70% of the economy, if they “are not out spending there is little hope the U.S. can avoid a near-term downturn,” Stifel said in a note.

Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META) were down more than 1%. 

Sentiment on Meta was also soured somewhat following a Reuters report Thursday, citing an internal company memo, that the social media company is bracing for slower growth in the second half of the year.

Chip stocks, which led the slide in tech a day earlier, were also on the back foot as investors awaited quarterly results from chipmaker heavyweight Micron (NASDAQ:MU) due after the market closes.

On the earnings front, RH (NYSE:RH) fell more than 10% after the furnisher company cut its full-year outlook, flagging weaker consumer demand that could continue into the second half of the year.

Walgreens Boots Alliance (NASDAQ:WBA), meanwhile, reported quarterly earnings that topped Wall Street estimates, but the drugstore chain kept its guidance unchanged as a slowdown in demand for Covid-19 vaccines is expected to weigh on growth.

In other news, bitcoin slipped below $20,000, triggering a fresh bout of selling across crypto-related stocks, with Coinbase (NASDAQ:COIN), Marathon Digital (NASDAQ:MARA), and Riot Blockchain (NASDAQ:RIOT) nursing heavy losses.

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