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Thanks Democrats.
Stocks took with steep losses Friday, closing a brutal month with a deep selloff driven largely by falling shares of technology companies.
The Dow Jones Industrial Average closed with a loss of more than 930
points, a decline of 2.8 percent, on the final trading day of April. The
Dow ended April down more than 6 percent from the start of the month and
nearly 10 percent from the beginning of 2022.
The tech-heavy Nasdaq took much heavier losses, dropping 4.2 percent on
the day and more than 14 percent since the start of April its worst
monthly loss since 2008. The composite is also in what investors consider
a bear market after dropping more than 20 percent from a record high set
last year.
The S&P 500 closed with a loss of 3.6 percent and was down roughly 10
percent from the start of the month.
Stocks have fallen steadily through most of the year as a combination of
high inflation, economic blowback from the war in Ukraine, stubborn pandemic-related supply challenges and the Federal Reserves ongoing
interest rate hikes rattled investors. Major technology companies, which powered much of the past years sharp rise in the stock market, have been
among the biggest losers in the current selloff.
Todays market action is another instance where big tech bellwethers are dragging down the rest of the market, said Charlie Ripley, senior
investment strategist for Allianz Investment Management.
Rising cost pressures and uncertain outlooks from the largest technology
names have investors agitated going into the weekend and investors are not likely to be comfortable any time soon.
Amazon shares fell 14 percent, the companys worst daily stock decline
since 2006, after the e-commerce giant reported a drop in revenue. Shares
of Apple, Google parent company Alphabet, Microsoft, Netflix, and PayPal
all fell more than 3 percent Friday.
The stock market turbulence is likely to stretch into the start of next
week before a pivotal three-day stretch of economic news.
The Federal Reserves interest rate-setting committee is set to meet in Washington, D.C. next week and is expected to announce a 0.5 percentage
point interest rate hike. Investors will be paying close attention to Fed
Chair Jerome Powells press conference following the Wednesday hike for
clues about the pace and size of future rate hikes.
Higher interest rates often cut into corporate profits as companies pay
more for loans, denting future stock dividends. Rising borrowing costs are
also likely to slow the economy, including the intense consumer demand
behind much of last years stock market rally.
The Fed is aiming to raise interest rates fast enough to cool off the overheated economy without derailing a strong job market or causing a recession. But economists have become increasingly concerned the central
bank may be unable to curb rising prices without raising rates high enough
to stall the economy.
The personal consumption expenditures price index the Federal Reserves preferred gauge of inflation rose 6.6 percent over the 12 months ending
in March, up from a 6.3 percent annual inflation rate in February, the
Bureau of Economic Analysis reported Friday. Annual inflation without food
or energy prices, which are more volatile, fell slightly to 5.2 percent in March, down from 5.2 percent in February.
A decidedly more hawkish Fed, coupled with still intractable supply chain issues, and rising energy prices may make the hope of a soft landing
from the Fed more elusive, said Quincy Krosby, chief equity strategist
for LPL Financial.
https://news.yahoo.com/dow-plunges-900-points-nasdaq-203145447.html
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