Financial markets took a sharp tumble again Friday, with media and tech stocks falling across the board amid new fears on Wall Street of a looming recession triggered by a new report on rising inflation.
Major market indexes had their worst declines for the week since January. On Friday, the Dow Jones Industrial Average dropped 880 points, or 2.7%, to close at 31,392.79. The S&P 500 fell 2.9% and the tech-concentrated Nasdaq Composite Index fell 3.5%, to 11,340.02.
Netflix shares slid 5.1%, to close at $182.94 — the streamer’s stock is down 69% year to date on concerns that its growth is stagnating. Also fueling the sell-off in Netflix was a downgrade by Goldman Sachs, which on Friday cut its rating “neutral” to “sell” and slashed its 12-month price target from $265 to $186/share.
In a research note about Netflix, Goldman Sachs’ Eric Sheridan wrote, “We have concerns around the impact of a consumer recession as well as heightened levels of competition on demand trends, both in the form of gross adds and churn, margin expansion and levels of content spend.”
Shares of Roku, meanwhile, tumbled 10.5% Friday, erasing gains from earlier in the week driven by a speculative rumor that Netflix may be interested in acquiring the company. Sources tell Variety there is no truth to chatter about Netflix potentially being interested in buying Roku.
Media stocks posting losses Friday included Disney (-3.8%), Warner Bros. Discovery (-4.9%), Paramount Global (-3.6%), Comcast (-1.3%), Lionsgate (-6.6%) and Fox Corp. (-3.3%). Shares of big tech companies also sank, with Amazon down -5.6% for the day, Apple dropping -3.9%, Meta off -4.6% and Alphabet slipping -3%.
The broad market declines came after the Labor Department on Friday morning reported the fastest annual increase in the consumer-price index in May 2022 — up 8.6% compared with a year earlier — since 1981.