As the Dow Industrials saw a significant dip, market attention pivoted to soaring oil prices, strong energy sector performance, and a concerning slide in consumer retail and airline stocks. Additionally, new tariffs enacted by the Trump administration on 60 trade partners are set to create long-term impacts, influencing global markets as the next trading session approaches.
Wall Street closed out the week with significant turbulence, as the Dow Industrials plummeted over 500 points, setting a tense stage for the upcoming trading session. Market watchers, alerted by CNBC TV producers, are dissecting today’s movements and anticipating tomorrow’s potential shifts.
Several individual stocks drew attention with their recent performance. American Express, despite a 7% gain over the last three months, remains 12% off its December high. Telecommunications giant Verizon has seen a 7% decline over three months and is down 15% from its March high, though its attractive 6.46% dividend yield (paying approximately 71 cents per share quarterly) might offer some solace to investors. Healthcare provider HCA Healthcare faced a tougher period, dropping 20% in three months and a substantial 32% from its March peak.
The energy market, however, painted a dramatically different picture. Brent crude futures surged an impressive 14% week-to-date, crossing the $100 per barrel mark on Thursday. West Texas Intermediate (WTI) crude futures also climbed significantly, up more than 11% this week and topping $90 a barrel. This sharp increase in crude prices has translated directly to the pumps, with the average U.S. price for a gallon of regular unleaded gasoline hitting $4.09, according to AAA. Gasoline futures alone have spiked nearly 18% in the past month, signaling continued upward pressure.
Reflecting these oil price dynamics, the S&P Energy sector emerged as the top-performing sector of the week, boasting a 3.5% gain. Key players in this sector saw strong rallies: EQT was up 7.7% this week (though still 22% below its March high), ExxonMobil gained 6.5% (11% off its March high), Diamondback Energy climbed 5% (4% off its May high), Occidental Petroleum rose 5% (14% off its March high), ConocoPhillips advanced 4.8% (11.5% off its March 30 high), and Chevron was up 3.8% (9.5% off its March 30 high). The S&P Utilities sector also performed well, ranking as the second-best sector with a 2.3% gain for the week.
Conversely, the rising energy costs appeared to squeeze the American consumer and, by extension, retail and airline stocks. The State Street PDR S&P Retail ETF (XRT) declined 3.4% this week and is 6% below its January high. The S&P Airline industry also struggled, down 2.7% this week and 13.5% from its June high. Major retailers felt the pinch: Target was down 3.7% in four days (7% off last week's high), Walmart fell 5.1% in four days (20% off its May high), Bath & Body Works plunged 7.3% in four days (a staggering 41% off its year-ago high), Dick's Sporting Goods slid 6% this week (16% off its June 22 high), and mall staple Abercrombie & Fitch dropped 4.6% this week (32% off its January high).
Adding another layer of complexity to the market outlook are looming global trade tensions. A CNBC report by Kevin Breuninger and Ashlee Trujillo highlighted that the Trump administration is set to impose new tariffs, ranging from 10% to 12.5%, on 60 American trade partners, impacting an astonishing 99% of U.S. trade. These tariffs, effectively replacing temporary measures, are anticipated to have a more sustained, long-term impact on global commerce. Early indicators show mixed reactions: the iShares MSCI Mexico ETF (EWW) is down 8% from its February high, while surprisingly, the iShares MSCI Canada ETF (EWC) hit a new high on Wednesday and is up 2% in July. The implications of these tariffs will undoubtedly be a central theme for Friday's trading, with CNBC providing continuous coverage.
