18 May: Market Highlight of the day
The markets were in a downward spiral Wednesday as Target’s earnings presentation led investors to believe that the company is not doing well. The Dow Jones Industrial Average DJIA fell over 1100 points, which marks its biggest one day loss since 2020.
The selloff began with tech stocks like Netflix and Amazon before spreading across other retail firms such as Walmart WAL -6.79%.
Big tech continues to see some of their gains trimmed as investors continue thinking about how the Federal Reserve might become more hawkish on monetary policy tightening.
Fed Chairman Powell announced that the central bank would “keep pushing” interest rates higher until inflation cools.
Investors remain concerned about the slowing growth of the global economy, which is leading to policy tightening from central banks. Treasury yields struggle as investors look for safer assets in this uncertain market environment
In the real economy, housing activity slowed down in the wake of rising mortgage rates.
Housing starts in the U.S., which measures how many homes are being built each year, fell 0.2% in April compared to last month’s rate.
The big oil companies are feeling the pressure as they see their profits wiped out due to increased economic uncertainty in America. Crude prices fell despite data that showed an increase in stockpiles and consumption.
Craig Erlam, analyst at online trading platform OANDA, said: “There are gloomy forecasts from central banks, with even the Fed now targeting a softish landing which feels very much like the stage before a mild recession. It may be time to buckle up and prepare for a very bumpy year.”
