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

By Yasin Ebrahim

Investing.com -- 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 0.5% on pace for its biggest first-half loss since 1970. The Dow Jones Industrial Average slipped 0.6%, or 170 points and the Nasdaq was down 0.8%.

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 percent in May, short of forecasts for a 0.4% rise, while last 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 ) and Microsoft were down more than 1%. Meta Platforms (NASDAQ: META ) was down less than 1% on the day even as the social media company is reportedly bracing for slower growth in the second-half of the year, Reuters reported Thursday, citing an internal company memo.

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

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