Why is the stock market down today? The S&P 500 is off to its worst 4-month start to the year since 1970.

The S&P 500 started the last trading day of April in the red, putting it on track for its worst four-month start to the year in more than half a century.

In Friday afternoon trading, the


and the

Nasdaq Compound

passed out 2.1% and 2.5%, respectively. Both indexes rebounded more than 2.5% on Thursday. the

Dow Jones Industrial Average

was down nearly 500 points, or 1.7%, after climbing 614 points on Thursday.

The S&P 500 has fallen 12% so far this year and is on track for its worst January-April performance since World War II. The Nasdaq was trading in a bear market, down more than 20% from an all-time high of 16,057 hit on November 19. The tech-heavy index is on track for its worst first four months on record, according to Dow Jones Market Data.

The profit results from


(symbol: AMZN) and


(AAPL) weigh on the Nasdaq. The combined market capitalization of the two companies as of Thursday’s close was $4.14 trillion, or about 20% of the Nasdaq’s overall market capitalization.

Amazon’s earnings missed estimates by nearly a dollar a share due to higher labor and shipping costs in the quarter. The company also gave a weak sales forecast for the current quarter. The stock fell 13%.

Apple’s profit and sales of $97.3 billion beat estimates, but the company said supply constraints in China resulting from the country’s Covid-related lockdown could cut second-quarter sales by 4 at $8 billion. The stock fell 2.1%.

While the Nasdaq was hardest hit on Friday, stocks across the board were down. It is not a surprise. There have been dozens of 2% daily gains in the S&P 500 since 2018, and the next day the index gained only a third of the time, according to Instinet.

Biggest concern for equities: The Federal Reserve is expected to raise interest rates aggressively to head off high inflation, a move that will likely slow economic growth and reduce its bond holdings, which has driven bond prices lower and higher their yields. This makes future corporate earnings worth less today, which weighs on stock market valuations.

Inflation, which is the root of all this, only got worse with the Russian-Ukrainian war. This prompted Western countries to block Russian products from the global market, putting even more pressure on consumers and corporate profit margins. Blockages in China are also blocking global access to supplies from the country.

Indeed, the personal consumption expenditure index, the Fed’s preferred measure of inflation, gained 6.6% year over year in March, according to the Commerce Department on Friday. Investors had hoped that inflation would have peaked, but this rate is higher than the 6.4% gain in prices observed in February.

“With global markets down double digits this year and daily headlines that include deepening lockdowns in China, the ongoing Russian-Ukrainian war, slowing global economic growth, inflation highs on several decades and the Federal Reserve in motion is little I wonder why the mood among investors remains austere,” wrote Keith Lerner, co-chief investment officer at Truist.

There is good news, however. Core PCE earnings, which exclude volatile – and recently skyrocketing – energy and food prices, gained just 5.2% in March. This is below the previous result of 5.3%. This means that prices in all areas are rising at a slower rate.

This could possibly ease the pressure on the Fed to aggressively raise interest rates, which investors would appreciate. The Fed will announce its interest rate decision next week.

Bond markets appeared relatively calm. The 2-year Treasury yield, which reflects market expectations for the benchmark lending rate in a few years, rose slightly to 2.71% from around 2.7% before the PCE report.

The slight increase in yield is not really a surprise. Yields have already reflected the Fed’s intention to raise rates. The 2-year Treasury yield, on course to close Friday just below its pandemic-era peak, has risen several times from just above 0.1% in January 2021. The yield has now had its biggest gain in 15 calendar months since the same period ended in January 1995, according to Dow Jones Market Data.

Here are six stocks moving on Friday:

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(TSLA) rose 2.6% after CEO Elon Musk said via Twitter that he no longer intended to sell Tesla shares after Friday. The billionaire executive recently sold some $4 billion worth of company stock, likely to help fund his takeover of the social media group




(CL) fell 4.8% after the company reported earnings of 74 cents per share, in line with estimates, on sales of $4.399 billion, above expectations of $4.398 billion.


(CVX) stock fell 2.4% after the company announced a gain of $3.36 per share, missing the FactSet consensus estimate of $3.41 per share, on sales of $54.4 billion, below expectations of $47.9 billion.

Exxon Mobil

(XOM) stock fell 0.8% after the company announced a gain of $2.07 per share, missing estimates of $2.23 per share, on sales of $90.5 billion, below expectations of $92.7 billion.


(ABBV) stock fell 8.7% after the company announced a professionalt $3.16 per share, beating estimates of $3.14 per share, on sales of $13.5 billion, below expectations of $13.6 billion.


(INTC) fell 6% after the company reported earnings of 87 cents per share, beating estimates of 81 cents per share, on sales of $18.35 billion, above expectations of 18, $31 billion.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com and Jack Denton at jack.denton@dowjones.com