Stocks ended mixed Friday, while Treasury bond yields inched higher and the dollar surged against its global peers, as markets closed out their worst week in two years focused on growth prospects in the world's biggest economy. Oil fell sharply from recent highs.
The Dow Jones Industrial Average finished down 38 points, or 0.13%, to 29,888. The S&P 500, which is down 23.1% for the year, gained 0.22%. The tech-focused Nasdaq finished up 1.43%.
Oil prices fell as fears of economic slowdowns grew. West Texas Intermediate futures dropped more than 6% to below $110 a barrel.
With big rate moves from central banks now largely behind it -- or clearly telegraphed for the near-term -- markets are now adjusting to slower growth prospects for both the U.S. economy and its major global peers, as inflation continues to surge, consumers pull back on discretionary spending and businesses trim new investment plans.
President Joe Biden, however, stressed late Thursday that a recession in the world's largest economy is not "inevitable" as he and his administration scramble to revive growth prospects heading into this fall's mid-term elections.
Americans, who endured a two-year pandemic only to be faced with the fastest inflation in forty years, record high gas prices and slowing economy are "really, really down", President Biden said, and argued that that pessimism has carried over into consumer sentiment, which hit an all-time low last week.
President Biden also rejected the notion that last year's pandemic support stimulus added to overall price pressures.
"You could argue whether it had on the margin a minor impact on inflation," the President said. "I don't think it did. And most economists do not. But the idea that it caused inflation is bizarre."
Data from Europe June 17, in fact, indicated that higher consumer prices remain an uncomfortable fact of current life, regardless of fiscal policy, with the region's inflation rate holding at a record high 8.1% last month despite recent efforts -- as well as higher rate signaling -- from the European Central Bank.
In the U.S, the recession debate has intensified following data from the Atlanta Fed showing essentially no growth in the domestic economy this quarter, following a 1.5% contraction over the first three months of the year, alongside a slow by steady increase in weekly jobless claims, stalled consumer spending and a weakening housing market.
That debate has pushed U.S. Treasury bond yields -- which were recently marching higher in the face faster Federal Reserve rate hikes -- back to multi-week lows as investors retrench into the safety of risk-free government bonds amid the ongoing sell-off in stocks.
Benchmark 10-year Treasury bond yields dipped to 3.229% as the marker closed, against a 3.164% peg for 2-year notes, while the dollar index rose 1% against a basket of six global currencies to 104.71 in late New York trading.
"We are hesitant to call the bottom in stocks until we see the impact of quantitative tightening, which is an undertow that could drag stock prices lower" said Richard Saperstein, chief investment officer at New York-based Treasury Partners.
"We see opportunities within large-cap tech stocks, particularly those with strong cash flows and moats around their businesses, as these kinds of stocks with growing recurring revenues, will be attractive in a slow growth environment with increasing recession risk," he added.
Europe's region-wide Stoxx 600 was marked 0.98% higher in afternoon Frankfurt trading, following on from a 0.32% slide for Asia's MSCI ex-Japan benchmark.
Twitter (TWTR) shares gained 1.2% following the first face-to-face meeting between staff and the microblogging website and billionaire Tesla (TSLA) CEO Elon Musk.
Musk, who is planning to purchase the group for $44 billion before taking it private, said staff cuts would likely be needed in order to control costs, and held to his recent view on working from home, suggesting only 'exceptional' staff would be permitted to do so remotely.
Adobe (ADBE) shares slumped 1.2% after the world's third-largest cloud software group forecast weaker-than-expected near-term revenues thanks in part to headwinds linked to the strength of the U.S. dollar.
World Wrestling Entertainment (WWE) shares were also in focus, dropping 3.6% after Vince McMahon, the charismatic billionaire owner, said he will step back from his role as CEO as the group probes allegations of so-called 'hush money' payments to a former employee.
