The S&P 500 inched higher Friday with markets on track for a losing week driven by fears of the Federal Reserve pulling back its stimulus.
The broad index added 0.6%. The Dow Jones Industrial Average gained about 170 points, or 0.5%. The Nasdaq Composite traded up 0.9%.
All three major stock indexes are on track to close the week lower. The S&P 500 is down 0.8% for the week, while the Dow is off 1% and the Nasdaq Composite is 1.3% 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.
This week, WTI crude oil has tumbled roughly 8% on the fears, taking energy stocks with it. Diamondback Energy and Valero Energy both shed more than 1% on Friday and are down double-digits on the week.
“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.”
Meanwhile technology stocks traded in the green Friday, providing the market with some support. Big Tech names like Microsoft and Netflix stocks moved higher. Chip stocks like Nvidia rose.
Tesla shares gained 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. Tesla shares are off 6% this week as investors worry about slowing growth in one of its key markets China.
—CNBC’s Pippa Stevens contributed reporting.