The so-called “stock market bloodbath” has continued on Friday with major indices falling down to the lows of the last October. What's going on?
Wall Street goes down on growth fears
On Thursday, technology equities led a dive on Wall Street, with the S&P 500 keeping to 15-month minimums and the Nasdaq heading for bear market territory, right after the key US financial institution confounded expectations for a toned-down approach to its interest-rate hike plan.
Contributing to the gloom were several downbeat earnings reports and also the American Congress trying to agree on a funding bill before a Friday midnight deadline for the purpose of preventing a partial shutdown of the US cabinet.
The Nasdaq tumbled by 2.3% demonstrating its session minimum and pushing the tech-heavy index over 20% below its August 29 maximum. Market experts are assured that if it manages to conclude at those levels, bear territory for the index will be confirmed.
The key US bank’s move on Wednesday to mostly keep to its plan for more rate lifts over the next two years as well as Jerome Powell's initiative to keep the Fed’s balance sheet-reduction plan in the auto mode spooked traders already concerned about decelerating economic surge.
It provoked a retreat in surge sectors, including healthcare and technology because market participants looked for comfort in the relative safety of defensive sectors, including real estate and utilities.
The technology sector that had led most of the market's long lasting bull marathon also found itself in bear market territory with its session minimum. Last the index declined by 2.01%, thus becoming the top drag on the market.
As for consumer equities, they also tumbled on fears of higher borrowing costs contributing to signs of decelerating consumer spending in the run-up to Christmas. As a matter of fact, the consumer discretionary index went down by 2.36%, while the traditionally defensive staples sector headed south by 1.46%.
ET the Dow Jones Industrial Average lost 1.77% reaching 22,911.29. Moreover, the S&P 500 tumbled by 1.46%.
Besides coronavirus, other news has been driving the stocks of Apple, Wallmart and General Motors to the lower levels.
Will coronavirus continue keeping the markets in fear? What releases should we wait for? Find out in the news!
WTI oil prices jumped up after Donald Trump’s 2 tweets
Today the US nonfarm payroll data will be reported that could cause fluctuations of the market.
WTI was at $20 per barrel just in the beginning of the day. Currently - above 25$.