U.S. stock indexes slip, heading for another losing week, despite upbeat Apple results

• The S&P 500 index SPX slipped 0.6% to 4,299, falling more than 10% below its Jan. 3 closing peak, which would meet the commonly used criteria for a correction.

• The Dow Jones Industrial Average DJIA fell around 0.9%, or nearly 300 points, to 33,870.

• The Nasdaq Composite Index COMP fell 43 points, or 0.3%, to 13,317.

• The small-capitalization Russell 2000 index
  RUT,
  -1.01%
  was trading flat on the session, after entering a bear market for the first time in 2 years.

What’s driving the market?

Stocks fell, after a short-lived fillip higher Friday, following fresh U.S. economic data. Reports showed U.S. consumer spending falling 0.6% in December, amid a wave of COVID-19 cases from the highly contagious omicron variant of coronavirus.

A measure of U.S. inflation preferred by the Federal Reserve climbed 5.8% in 2021 after another increase in December. Employment costs rose 1% in the fourth quarter. At 10 a.m. Eastern, investors will get the University of Michigan consumer sentiment index for January.

A volatile month has whipsawed investors, who have juggled worries over the pace of Federal Reserve interest rate increases, a mixed earnings reporting season, the ongoing pandemic fallout and geopolitical worries surrounding a potential Russia invasion of Ukraine.

Questions over the Fed’s plans to tackle inflation have hit interest rate-sensitive technology and growth stocks particularly hard. This week’s Fed meeting produced no change in interest rates, but Chairman Jerome Powell didn’t rule out a potential rate hike at each meeting this year, and said the central bank needed to be “nimble.” 

The Nasdaq Composite is facing its longest weekly losing streak since November 2012 — it was down 3% as of Thursday. For the month, the Nasdaq has lost around 14%, putting it on pace for the worst monthly performance since October 2008, during the depths of the Global Financial Crisis.

Positive news came from Apple
AAPL,
+4.46%,
whose premarket share gain pared to around 2% in morning trading after the iPhone maker sailed past Wall Street’s earnings expectations for the holiday quarter, and executives forecast continued revenue growth in the current quarter. Earnings topped $30 billion for the first time, and the results mark a high point in a thus-far mixed reporting season.

“Apple’s blowout results are just what the tech sector needed to get out of its recent funk. The iPhone giant’s big beat could be the next catalyst to spark a rally in the tech space,” said Jesse Cohen, senior analyst at Investing.com, in a note to clients.

Opinion: After a monster quarter, Apple’s non-forecast is good enough for Wall Street

But elsewhere in the tech realm, stock in Robinhood Markets
HOOD,
-1.25%
tumbled 15% in premarket trading after the trading app closely associated with the “meme stocks” phenomenon swung to a bigger-than-expected quarterly loss and reported a drop securities-trading volumes.

Opinion: Robinhood is about to not celebrate a very unhappy anniversary

The Dow, S&P 500 and Russell 2000, which slipped into correction territory on Thursday, are on pace for their worst months since March 2020, according to some data.

Read: Here’s what history says about stock-market returns during Fed rate-hike periods

The Fed’s latest revelations have hit gold prices the hardest, with the precious metal
GC00,
-0.56%
pushing further below the key $1,800 an-ounce mark on Friday.

“The biggest worry for traders now is how much of an interest rate hike they will see coming in March. There is so much noise as some market players believe that the Fed could increase the interest rate by 50 basis points,” said Naeem Aslam, chief market analyst at AvaTrade.

“Looking at the FOMC comments and their decision this week, it is very clear that the Fed has embarked on a journey that shows they will adopt their most hawkish monetary policy in decades,” he said, in a note to clients.

Opinion: Stock investors know not to fight the Fed, but you can fight the Fed Model

On the geopolitical front, Russia’s foreign minister Sergei Lavrov said Friday that Moscow doesn’t intend to start a war, but also “would not let our interests be rudely trampled on and ignored.”

A day earlier saw U.S. President Joe Biden warning Ukraine’s president of a “distinct possibility” of Russian military action against its neighbor in February.

What companies are in focus?

• Visa Inc.
  V,
  +6.02%
  topped $7 billion in quarterly revenue for the first time and shares climbed nearly 6% in premarket trading.

• Western Digital Corp. shares
  WDC,
  -6.67%
  slid 6.2% after the data-storage products company gave a weak outlook, amid a struggle to keep up with demand amid supply-chain problems.

• Caterpillar Inc.
  CAT,
  -6.10%
  shares fell 3.3% after maker of industrial equipment and tractors reported earnings and revenue that beat forecasts.

• Chevron Corp.
  CVX,
  -4.78%
  stock fell about 4% after the energy giant reported a disappointing profit, even as revenue beat.

• KLA Corp.
  KLAC,
  -2.96%
  shares fell 3.6% Friday after a weak outlook from the chip-equipment maker that overshadowed an earnings beat for the quarter.

How are other assets trading?

• The yield on the 10-year Treasury note 
  TMUBMUSD10Y,
  1.787%
  edged back less than a basis point to 1.80%. Yields and debt prices move opposite each other.

• The ICE U.S. Dollar Index 
  DXY,
  -0.02%,
   a measure of the currency against a basket of six major rivals, was modestly lower.

• Oil futures 
  CL.1,
  +1.59%
   rose $1.72, or 2.2%, to $88.53 a barrel on the New York Mercantile Exchange Gold futures 
  GC00,
  -0.56%
   fell 0.4% to $1,787.50 an ounce below the $1,800 an ounce threshold.

• In European equities, the Stoxx Europe 600 
  SXXP,
  -1.44%
   fell 1.7%, while London’s FTSE 100 
  UKX,
  -1.37%
  dropped 1.5%.

• The Shanghai Composite 
  SHCOMP,
  -0.97%
   fell 0.9%, while the Hang Seng Index 
  HSI,
  -1.08%
  was down 1% and Japan’s Nikkei 225 
  NIK,
  +2.09%
   rose 2%.