Major U.S. stock averages rebounded Friday while markets remained on track for a losing week driven by fears of the Federal Reserve pulling back its stimulus.
The Dow Jones Industrial Average gained about 240 points, or 0.7%. The S&P 500 added 0.7%. The tech-heavy Nasdaq Composite rose 0.8%.
Technology stocks traded in the green Friday, providing the market with support. Microsoft, Cisco and Salesforce were among the biggest gainers in the Dow as investors snapped up tech stocks amid concerns about slowing economic growth. Chip stocks rose, with Nvidia among the Nasdaq’s top winners.
Tesla shares inched higher after Elon Musk’s electric car maker had an AI day, where it unveiled a new custom chip and plans to build a humanoid robot. The stock is down more than 5% this week as investors worried about growth in China, one of the electric vehicle maker’s key markets.
This week, WTI crude oil has tumbled more than 8% on concerns about the pace of economic recovery, taking energy stocks with it. Diamondback Energy and Valero Energy are down roughly 10% and 9%, respectively, on the week.
All three major stock indexes are on track to close the week lower. The S&P 500 is down 0.7% for the week, while the Dow is off 1.1% and the Nasdaq Composite is 1.1% lower.
Minutes from the Fed’s July meeting released this week showed the central bank is willing to start reducing its monthly asset purchases this year. Investors sold equities and commodities this week and bought bonds on fears the move by the Fed may upend a global economy already under stress by the delta variant.
“With Fed tapering coming while delta variant keeps spreading, the transition away from liquidity/policy regime to more mid-cycle markets means we may experience a bumpier ride ahead,” Barclays equity strategists said in a note. “Market narrative may thus turn more cautious, as concerns about peaking growth rates, Delta variant and policy mistake may prove headwinds, at a time where seasonality and technicals are unfavourable.”
—CNBC’s Pippa Stevens contributed reporting.