U.S. Stocks Close Lower, S&P 500 and Nasdaq Composite in Correction Territory

The U.S. stock market experienced a challenging week as the S&P 500 and Nasdaq Composite entered correction territory. On Friday, the Dow Jones Industrial Average lost approximately 366 points, concluding the day down 1.1% near 32,417, according to preliminary FactSet data.

S&P 500 and Nasdaq Composite Meet the Definition of Market Correction

The S&P 500 index declined by 0.5%, finishing around 4,117. This level marks a market correction, as it is at least 10% below its previous peak in July, according to Dow Jones Market Data.

Meanwhile, the Nasdaq Composite Index observed a 0.4% increase but recorded its third consecutive weekly decline. It suffered a loss of 2.6% for the week. Similarly, the S&P 500 experienced a 2.5% decrease, while the Dow fell by 2.1% since Monday.

Pressure from Higher Treasury Yields

Rising long-dated Treasury yields have significantly impacted stocks. The 10-year Treasury yield eased back to about 4.846% on Friday after briefly reaching a high of 5% in recent sessions. This volatility has put additional pressure on the market.

Upcoming Focus on Treasury Borrowing Needs and Federal Reserve Decision

Next week, all eyes will be on the U.S. Treasury's release of its expected $1.5 trillion borrowing needs as well as the Federal Reserve's decision on interest rates scheduled for Wednesday. These developments have the potential to influence the direction of the market going forward.