U.S. Stocks Seeing Substantial Volatility On Quadruple Witching Day

wallstreet3 17jun22 lt

Stocks have seen substantial volatility during trading on Friday, with the major averages showing wild swings back and forth across the unchanged line following the sell-off seen over the course of the previous session.

The major averages have moved to the upside in recent trading, with the tech-heavy Nasdaq leading the way higher. Currently, the Nasdaq is up 217.26 points or 2 percent at 10,863.36, while the Dow is up 127.20 points or 0.4 percent at 30,054.27 and the S&P 500 is up 27.73 points or 0.8 percent at 3,695.50.

The volatility on Wall Street comes amid a "quadruple witching" day, which refers to the simultaneous expiration of stock index futures, single-stock futures, stock options and stock index options.

Traders may also be expressing some uncertainty about the near-term outlook for the markets following yesterday's sell-off.

The sharp pullback on Thursday more than offset Wednesday's rally, with the major averages falling to their lowest levels in well over a year.

In U.S. economic news, the Federal Reserve released a report showing industrial production increased by less than expected in the month of May,

The Fed said industrial production crept up by 0.2 percent in May after surging by an upwardly revised 1.4 percent in April.

Economists had expected production to rise by 0.4 percent compared to the 1.1 percent jump originally reported for the previous month.

"The muted 0.2% m/m rise in industrial production in May adds to the evidence that the economy is slowing," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But there is still little in activity data to suggest a recession is on the horizon, or to dissuade the Fed from pressing ahead with more aggressive policy tightening."

A separate report from the Conference Board showed a continued decrease by its reading on leading U.S. economic indicators in the month of May.

The report showed the Conference Board's leading economic index fell by 0.4 percent in May, matching the revised drop seen in April as well as economist estimates.

"The US LEI fell again in May, fueled by tumbling stock prices, a slowdown in housing construction, and gloomier consumer expectations," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board.

He added, "The index is still near a historic high, but the US LEI suggests weaker economic activity is likely in the near term—and tighter monetary policy is poised to dampen economic growth even further."

Sector News

Airline stocks have moved sharply higher over the course of the session, with the NYSE Arca Airline Index soaring by 5.1 percent after ending the previous session at its lowest closing level in almost two years.

Substantial strength is also visible among biotechnology stocks, as reflected by the 4.5 percent spike by the NYSE Arca Biotechnology Index.

Networking stocks are also turning in a strong performance in afternoon trading, with the NYSE Arca Networking Index jumping by 2.5 percent.

On the other hand, energy stocks continue to see significant weakness amid a steep drop by the price of crude oil. Crude for July delivery is currently plunging $7.79 to $109.80 a barrel.

Reflecting the weakness in the energy sector, the NYSE Arca Oil Index is down by 5.9 percent, the NYSE Arca Natural Gas Index is down by 4.5 percent and the Philadelphia Oil Service Index is down by 3.9 percent.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.8 percent, while China's Shanghai Composite Index jumped by 1 percent.

The major European markets also finished the day mixed. While the German DAX Index advanced by 0.7 percent, the French CAC 40 Index edged down by 0.1 percent and the U.K.'s FTSE 100 Index fell by 0.4 percent.

In the bond market, treasuries are extending the upward move seen over the course of the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 9.8 basis points at 3.209 percent.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT