AGI – Wall Street is closed Thursday, May 5 Deep red and records its worst session of the year, as investors review the excitement sparked by the Federal Reserve’s announcements yesterday and the reversal of sentiment. The Nasdaq is saving its third biggest point loss ever, after the “black” sessions on March 12-16, 2020, at the start of the Covid pandemic.
The Dow Jones left 3.12% on the floor at 32,997.97 points (with a daily loss of 1,033.07 points), the S&P 500 lost 3.44% to 4,152.38 and the Nasdaq collapsed to -4. , 99% at 12,317.69 points.
The Investor sentiment worsened In the face of concerns that a rate hike by the Federal Reserve will not be enough to tame the record rise in inflation.
All three major Wall Street indices have Erase the gains made during Wednesday’s rally. Tech giants declined, including Alphabet (-4.71%), Apple Inc (-5.57%), Microsoft Corp (-4.36%), Google parent company, Meta Platforms (-6.77%)), Tesla (-8.33%). ) and Amazon. com (-7.56%).
However, it was not only the high-growth stocks that fell, but the ones that suffered in 2022 due to the prospect of higher interest rates questioning their potential future earnings. Selling hit all market areas. “Investors are not looking at fundamentals (such as earnings) at the moment, and this is an issue of sentiment,” said Megan Hornman, chief investment officer at Verdence Capital Advisors.
The US central bank raised interest rates by half a percentage point on Wednesday as expected, and President Jerome Powell explicitly ruled out a 75 basis point hike at the next meeting. However, traders raised their bets by 75 basis points at the June meeting.
Concerns about Fed policy moves, mixed earnings from some big growth firms, the conflict in Ukraine, and pandemic-related shutdowns in China have recently hit Wall Street, putting A better-than-expected quarter in the shade.
Only a few companies in the S&P 500 remained in positive territory. Among them there Twitter, which is up 2.57% After Elon Musk revealed that Oracle co-founder Larry Ellison and Sequoia Capital are among the investors who will support his acquisition of the social media giant with $7.14 billion in funding.
All 11 major sectors of Standard & Poor’s fell, with estimated consumption in the foreground. The index was lowered by Etsy Inc (-16.83%) and eBay Inc (-11.72%), after expected second-quarter earnings were below Wall Street expectations.
The technology sector has also collapsed, with Intuit Inc among the largest shares (-8.50%) the day after agreeing to pay $141 million for an alleged misleading advertising campaign for its TurboTax product. “It’s market areas that are purely discretionary that are taking a hit today, with everyone expecting this to be a tough time for consumers in the coming quarters,” said Hornman of Verdence Capital Advisors.
Cboe Volatility Index, also known as Wall Street’s fear index rose significantly today to 22.7%.
Investors’ attention now turns to the monthly employment report to be released tomorrow by the Labor Department. The report will give important clues to the strength of the labor market and its impact on monetary policy.
Asian stock market crash
The collapse at the opening of the Asian stock exchanges, due to the decline in Wall Street caused by concerns about high interest rates and inflation. The Hang Seng Index is down 2.44%.
The Shanghai Composite Index is down 1.84 percent, while the Shenzhen Composite is down 2.42 percent. In Japan, the Nikkei 225 index opened lower (-0.13%). The broader Topix index is at -0.21%.