Daily Stock Market News

Dow tumbles 500 points, Nasdaq sheds 3% as Apple slides


The Fed needs to catch up to inflation without surprising markets, says Stanford's John Taylor

Stocks slumped Thursday, giving back some of the prior day’s rally, as a decline in Apple shares weighed on the major averages.

The Dow Jones Industrial Average dropped 443 points, or 1.5%. The S&P 500 and Nasdaq Composite declined 2.06% and 2.96%, respectively.

The sell-off was broad-based. At one point during the session, just three stocks in the S&P 500 were trading higher. There are now five gainers in the broader market index.

Apple shares fell more than 4% after Bank of America downgraded the tech stock to neutral from buy, and slashed its price target, citing weaker consumer demand for the iPhone maker.

“When you get to that level of concentration, you’re also going to have more volatile indices,” said Robert Cantwell, portfolio manager at Upholdings. “Apple just wants you to think that it’s a macro problem as opposed to a product cycle problem. But the reality is that they’re dealing with both right now.”

A stronger-than-expected jobless claims report didn’t help sentiment, building on the notion that the Federal Reserve will keep doing aggressive rate hikes to fight inflation without concern it’s going to hurt the labor market.

The 10-year U.S. Treasury yield rebounded to trade at about 3.753%. A day prior, it posted its biggest one-day drop since 2020 after briefly topping 4%.

The moves followed a broad rally for stocks Wednesday, as the Bank of England said it would purchase bonds in an effort to help steady its financial markets and the cratering British pound. Sterling has stooped to record lows against the U.S. dollar in recent days.

The Dow on Wednesday gained more than 500 points, or 1.9%, while the S&P 500 rose nearly 2% after hitting a new bear market low on Tuesday. Both indexes snapped six-day losing streaks.

“For a more sustained rally, investors will need to see convincing evidence that inflation is coming under control, allowing central banks to become less hawkish,” UBS’ Mark Haefele wrote in a Thursday note.

Wednesday’s rally put the major averages on pace for a losing week and their worst month since June. The Nasdaq Composite is leading the monthly losses, down about 9%, while the Dow and S&P are on pace to close 7% and 7.7% lower, respectively.



Read More: Dow tumbles 500 points, Nasdaq sheds 3% as Apple slides

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