Another erratic trading day on Wall Street on Thursday ended with the uneven closing of major stock indices after the market reversed most of its initial decline in the closing hours of trading.
The Standard & Poor’s 500 Index closed just 0.1% lower after losing 1.9% during the day. The Dow Jones Industrial Average fell 0.3%, while the Nasdaq Composite rose 0.1%.
Trading on Wall Street has been volatile, with the index tending to fluctuate sharply from day to day or from day to day as investors seek to protect their portfolios from the effects of high inflation and the federal government’s rate hikes, the highest in decades. The reserve moves to contain the soaring price.
Another terrifying read on inflation sparked an early sell wave on Thursday, with tech stocks weighing the most on the S&P 500. The sector achieved solid growth during the COVID-19 pandemic, driven by widespread shifts to telecommuting and shopping, but fell sharply as inflation worsened and interest rates rose. Apple and chipmaker Nvidia fell 2.7% each and Microsoft fell 2%.
“The decline in growth stocks, especially tech stocks, has been dramatic,” said Brian Price, head of investment management at Commonwealth Financial Network. “Then we think we’ve probably gone too soon.”
The S&P 500 fell 5.10 points to close at 3,930.08. The Dow fell 103.81 points to close at 31,730.30. The Nasdaq closed at 11,370.96, up 6.73 points. All indices are maintaining a sharp weekly decline, extending the market’s downturn this year. The benchmark S&P 500 is down 17.5% this year and the Nasdaq is down 27.3%.
Small company stocks outperformed the rest of the market. The Russell 2000 index rose 21.24 points, or 1.2%, to close at 1,739.38.
The 10-year Treasury yield fell from 2.92% to 2.87%.
Ministry of Labor on Thursday April wholesale prices surged 11% 1 year ago. As businesses strive to cover higher costs, many of the wholesale-level costs are being passed on to consumers. This has raised further concerns about possible spending cuts that could stifle economic growth.
Inflationary pressures are built for consumers. Wednesday’s Labor Department report retail price Wall Street is hotter than expected. It also saw bigger-than-expected gains in prices other than food and gasoline, which economists call “core inflation” and better predict future trends.
Rising inflation has pushed the Fed down the benchmark interest rate from its near-zero lows. They also said they could continue to raise rates up to twice the usual rate at the next meeting. Investors are concerned that if the central bank raises interest rates too high or too quickly, it could cause a recession.
inflation has been exacerbated by Russian invasion of Ukraine and the impact of disputes on rising energy prices. China’s recent lockdown Supply chain and production problems have also worsened at the center of rising inflation amid concerns over a COVID-19 resurgence.
The impact of higher prices on consumers has been seen worldwide. on Thursday, Britain is an economy It grew at the slowest pace in a year in the first quarter. This raises concerns that the UK could plunge into a recession.
Investors are keeping a close eye on recent corporate performance, assessing how businesses and industries are handling inflationary pressures. entertainment tycoon Disney It fell 0.9% after a recent earnings report missed analysts’ forecasts. Coach and Kate Spade owner Tapestry posted the biggest gain on the S&P 500, up 15.5% after reporting strong financial results.
“We will continue to pay attention to the Fed’s comments, but it’s worth paying attention to the company’s outlook on earnings releases,” Price said. “It will make investors more and more focused on how durable the company’s earnings are as we enter the second half.”
On Thursday, healthcare companies and retailers showed gains in the market. Pfizer rose 2.8% and Home Depot rose 2.4%.
Bitcoin got caught up in sales. The digital currency fell 2.9% to $28,551 in late afternoon trading, according to CoinDesk. Just six months ago, the price was over $66,000.
“Bitcoin remains vulnerable to a final plunge that could coincide with a stock market sell-off before many crypto investors feel the bottom is right,” Edward Moya, senior market analyst at OANDA, wrote in a research note on Thursday.