As the market continues to be trembled by volatility, the Dow Jones Industrial Average fell below 30000 for the first time since January 2021, as Investors were concerned that the Federal Reserve’s strong approach to inflation control would cause the economy to enter a recession.
USA Sensex Extends Losses To 6th Session! Markets Fell Across The Board
Stocks rose on Wednesday after Federal Reserve Chairman Jerome Powell said the central bank’s 0.75-point interest rate hike this week would not be repeated. That euphoria faded on Thursday, and markets fell across the board as investors reviewed the uncertainties ahead.
High inflation, increasing interest rates, and mounting fears about corporate earnings and economic development have damaged investors’ appetite for risk in 2022, resulting in significant falls in major indices.
The blue-chip index is down 18% this year, while the S&P 500 is down 23% and the tech-heavy Nasdaq Composite is down 32%.
As inflation and worries of slowing economic growth weigh on investors, the S&P 500 and Nasdaq Composite slid further into the bear market territory, closing the session down around 24% and 34% from their all-time highs, respectively. Meanwhile, the Dow is down 19 percent from its all-time intraday high set on January 5.
On Thursday, the Dow dipped below 30,000 for the first time since January 2021. When significant monetary and fiscal stimulus drove a larger market surge — headed by tech shares — and brought the main averages to then-record highs in November 2020, the average first went over that level.
To put it another way, the stock market has done very well over the last twenty-seven months, despite the economy being subjected to nearly unprecedented strains—longer shutdowns, widespread supply-chain issues, and, most recently, a worldwide energy-price shock.
Even with the recent market drop, investors who have kept their money in an index fund or have a well-diversified portfolio of individual equities have made significant returns compared to the pre-coronavirus period. The message from CNBC or social media may go unnoticed, but the stats speak for themselves.
Of course, this year’s drop has been shocking, especially for investors who piled into stay-at-home favorites like Netflix, Zoom, and Peloton, which are now trading at a fraction of their pre-pandemic highs.
Intel, Walgreens, Home Depot, JPMorgan, 3M, and American Express all reached fresh 52-week lows, while tech stocks fell following a brief rally on Wednesday. Amazon, Apple, and Netflix all dropped roughly 4%. Tesla and Nvidia both saw their stock prices fall by 8.5 percent and 5.6 percent, respectively.
Thursday was also a down day for travel stocks. United and Delta were down 8.2 percent and 7.5 percent, respectively, while cruise company stocks such as Carnival, Norwegian Cruise Line, and Royal Caribbean were down over 11 percent.
On Thursday, all major sectors fell, headed by consumer discretionary and energy, which both fell by roughly 5%. Only four Dow equities finished the day higher.
Staples stocks, which are recognized for their consistent cashflows that can withstand recessions, have been trading in positive territory or around the flatline. Walmart and Procter & Gamble were somewhat higher.
The main question for most people—especially the nearly half of American adults who don’t own stocks, whether through personal stocks or index funds—is whether the market downturn is just a correction for past excesses or something. A recession in which GDP shrinks and unemployment rises significantly.
Shares of Coinbase Global Inc fell 7.2 percent Thursday, hitting a new closing level.
For the first time in 15 years, the Swiss National Bank hiked interest rates overnight. On Thursday, the Bank of England was expected to raise interest rates for the seventh time in a row.
The 10-year Treasury yield decreased on Thursday as markets sank, and it was the last trading at around 3.24 percent. Earlier this week, the benchmark rate surpassed 3.48 percent for the first time in 11 years.
Expenditures and employment are the engines of economic development, and both are in good shape, despite the sharp rise in inflation that has eroded real incomes. Retail sales rose 0.9 percent last month, up 8.2 percent from a year earlier. By 2022, employers added an average of more than 500,000 jobs each month.