Stocks Slide on Weak Economic Data as Bonds Climb: Markets Wrap

(Bloomberg) — Stocks got hit after weaker-than-expected economic data raised concern about the outlook for Corporate America amid a surge in consumers’ long-run inflation views to the highest since 1995.

From consumer sentiment to housing and services, Friday’s readings left investors questioning growth prospects at a time when the Federal Reserve is signaling no rush to cut rates. Economically sensitive corners of the market bore the brunt of the selling. The S&P 500 erased this week’s advance. Despite the rise in inflation expectations, bond yields remained lower.

“Today seems to be a classic risk-off type of day,” Katy Kaminski at AlphaSimplex Group LLC told Bloomberg Radio. “Consumer confidence is down, long-term inflation expectations are up. People are just a little nervous about what all this means.”

A notional $2.7 trillion worth of options tied to equities and exchange-traded funds was set to expire on Friday, according to Goldman Sachs Group Inc. That’s usually associated with amplified price swings.

The S&P 500 fell 0.8%. The Nasdaq 100 slid 1.1%. The Dow Jones Industrial Average slipped 1%. The Russell 2000 index of small caps dropped 1.5%. A Bloomberg gauge of the Magnificent Seven megacaps lost 1.5%.

The yield on 10-year Treasuries declined five basis points to 4.46%. The Bloomberg Dollar Spot Index rose 0.2%.

To Mark Hackett at Nationwide, equity markets remain in a period of consolidation following an impressive two-year run, with little change in the S&P 500 since early December.

The index is attempting to break out of the trading range it has been in since the election, remaining in a 4% range over the past three months, the narrowest range since 2017, he noted.

“Beneath the surface, however, there is an interesting shift in market leadership, which could propel markets forward, as the risk/reward dynamics in the international and value space catch the eye of investors,” Hackett said.

Hedge funds have trimmed net positions on most of the the Magnificent Seven stocks, according to Goldman Sachs Group Inc. strategists. 

“The latest filings show hedge funds becoming more selective within popular sectors and themes,” the team including Ben Snider and Jenny Ma wrote. Despite the trimming, six companies in the group of megacaps still rank among top positions for hedge funds, with the exception being Tesla Inc.

More broadly, short interest for the median S&P 500 stock has also increased to the highest level since 2020, now at 2% of market cap.

Corporate Highlights:

• The US Justice Department has been investigating UnitedHealth Group Inc.’s Medicare billing practices, a person familiar with the matter said. The company’s stock fell sharply.
• Coinbase Global Inc. said the Securities and Exchange Commission has agreed to drop its lawsuit that accused the largest US cryptocurrency trading platform of running an illegal exchange. The agreement is pending commissioner approval.
• US prosecutors and regulators are investigating a $32 million deal between CrowdStrike Holdings Inc. and a technology distributor to provide cybersecurity tools to the Internal Revenue Service, according to two people familiar with the matter and a document seen by Bloomberg News.
• Booking Holdings Inc., the parent to travel brands such as Kayak and Priceline, delivered better-than-expected fourth-quarter results following a bustling holiday season.
• Rivian Automotive Inc. tumbled after warning it’s poised for a first-ever decline in electric-vehicle deliveries in 2025, heralding a new challenge after the company achieved a long-held profitability goal.
• Akamai Technologies Inc., an infrastructure software company, gave an outlook that was weaker than expected. Several firms downgraded the stock.
• Block Inc. sank after the digital-payments company posted fourth-quarter profit and revenue below analysts’ forecasts.
• Celsius Holdings Inc.’s revenue beat estimates. The company also confirmed it would buy rival Alani Nutrition for $1.8 billion in cash and stock, including $150 million in tax assets.
• Novo Nordisk A/S’s weight-loss and diabetes drugs are no longer in short supply, US regulators said, a decision that’s expected to curtail widespread access to cheaper copies of the popular medications.

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.8% as of 12:21 p.m. New York time
• The Nasdaq 100 fell 1.1%
• The Dow Jones Industrial Average fell 1%
• The MSCI World Index fell 0.6%
• The Russell 2000 Index fell 1.5%
• Bloomberg Magnificent 7 Total Return Index fell 1.5%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.5% to $1.0453
• The British pound fell 0.2% to $1.2641
• The Japanese yen rose 0.2% to 149.41 per dollar

Cryptocurrencies

• Bitcoin fell 0.3% to $97,857.73
• Ether fell 0.9% to $2,703.77

Bonds

• The yield on 10-year Treasuries declined five basis points to 4.46%
• Germany’s 10-year yield declined six basis points to 2.47%
• Britain’s 10-year yield declined four basis points to 4.57%

Commodities

• West Texas Intermediate crude fell 2.2% to $70.89 a barrel
• Spot gold was little changed

–With assistance from Sujata Rao, Macarena Muñoz, Anand Krishnamoorthy and Divya Patil.

©2025 Bloomberg L.P.