U.S. stock slipped on Friday and the market headed for a losing week as investors braced for tighter monetary policy from the Federal Reserve.
The Dow Jones Industrial Average inched 20 points higher, or 0.06%, while the S&P 500 dipped 0.1% and Nasdaq Composite fell 0.3%.
Shares of transport stocks UPS and Union Pacific dipped about 1% premarket on the back of a downgrade from Bank of America, which cited concerns about weakening demand and declining prices in the industry.
Despite a mild rebound Thursday and Friday’s early gains, the major averages were headed for weekly declines. The S&P 500 and Nasdaq were down 1% and 2.6%, respectively, for the week through Thursday’s close. The Dow was down 0.7% week to date. Those losses would mark the first weekly losses for the S&P 500 and Nasdaq in four weeks. Meanwhile, the Dow is headed for back-to-back weekly declines.
The losses have been driven by a change of tone by the Federal Reserve, signaling it will be even more aggressive to fight inflation. On Wednesday, the central bank disclosed its March meeting minutes, revealing that policymakers plan to reduce their bond holdings by a consensus amount of about $95 billion a month. The minutes also indicated potential interest rate hikes of 50 basis points in future meetings. A basis point equals 0.01%.
This followed strong comments by Fed Governor Lael Brainard earlier in the week who said the central bank could start reducing its balance sheet at a “rapid pace” as soon as May.