To The Moon

S&P 500 Drops for Third Straight Week

U.S. stock indexes edged lower Friday to end an ugly week after the Federal Reserve signaled it may not be done hiking rates.

The $S&P 500(.SPX)$  fell 0.2% Friday and closed down 2.9% for the week, its worst performance since March and third straight weekly loss. The $NASDAQ(.IXIC)$ dropped 0.1% Friday, and logged its third consecutive week of losses, with tech shares bearing the brunt of the recent selloff. The $DJIA(.DJI)$ was 0.3% lower Friday.

Treasury yields edged lower after closing at a 15-year high on Thursday. The yield on the 10-year bond fell to 4.438%, from 4.479% Thursday.

Yields have pushed higher since the Fed's Wednesday meeting, where chair Jerome Powell left the door open for another interest rate increase this year and said the central bank expects to keep rates higher for longer than it previously forecast to ensure inflation is under control.

"The fear is that stronger-than-expected growth will force the Fed to maintain its restrictive stance for some time," said Art Hogan, chief market strategist at B Riley Wealth Management.

The prospect of a prolonged period of higher rates has investors trying to assess the impact of elevated borrowing costs on consumers and companies. Higher bond yields can also make riskier assets like stocks look comparatively less attractive.

That has investors pulling back on risk. U.S. investors were net sellers of mutual funds and exchange-traded funds for the week ended Wednesday, withdrawing $16.8 billion, according to LSEG Lipper data.

Conflicting economic reports are making it difficult to predict the Fed's path. The Labor Department reported initial jobless claims that came in below analyst estimates on Thursday, a sign of a still-strong job market. On Friday, S&P surveys showed the economy losing some momentum toward the end of summer, with an index tracking the U.S. services sector slipping to an eight-month low.

Shares of financial technology companies took a hit this week, largely thanks to higher yields that are pushing up their borrowing costs and squeezing margins. Buy-now-pay-later company $Affirm Holdings(AFRM.US)$ saw its shares drop 17% for the week, while competitor $Block(SQ.US)$ fell 15% to a three year low. $PayPal(PYPL.US)$ shares dropped 10% on the week.

Elsewhere Friday, $Ford Motor(F.US)$ shares rose 1.9% after the United Auto Workers union spared the automaker from more walkouts based on progress in contract talks. Ford was among the S&P 500's best performers.

$Seagen(SGEN.US)$ shares rallied 3.5% after the biotech company posted positive results from a Phase 3 study of a cancer-drug combination including its Padcev treatment.Meanwhile, shares of $Activision Blizzard(ATVI)$  rose 1.7% after its acquisition by $Microsoft(MSFT)$  cleared a regulatory hurdle in the U.K.

Overseas, the Stoxx Europe 600 slipped 0.3% Friday. Japan's Nikkei 225 fell 0.5% and the Shanghai Composite Index rose 1.5%.

Oil prices edged higher, with Brent crude, the international benchmark, closing at $93.27 a barrel.

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