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Stock Market Today: 2% Drop as Inflation, Fed, Oil Concerns Weigh on Traders

Published 06/28/2022, 03:29 PM
Updated 06/28/2022, 03:50 PM

By Daniel Shvartsman

Investing.com -- Markets dropped after a promising start to the day, as risk assets suffered on Tuesday amidst signs that oil's high price is stabilizing and that the Fed is not interested in slowing down.

The S&P 500 dropped 2% on the day to 3822, while the Dow Jones Industrial Average dropped 1.6%. The Nasdaq Composite took the biggest hit, dropping 3%, a sign that the concerns of inflation and lagging growth predominated in Tuesday trading.

One of the blows to bullish hopes was cold water from the Fed in the form of pledges to continue to curb inflation. In an interview on LinkedIn, San Francisco Fed President Mary Daly said, "Many are worried that the Fed might be acting too aggressively and maybe tip the economy into recession. I am myself worried that left unbridled, inflation would be a major constraint and threat to the U.S economy and continued expansion." New York Federal Reserve Bank President John Williams and St. Louis Fed President James Bullard echoed those statements in separate interviews.

As a reminder of that potentially unbridled inflation, both crude oil and Brent oil closed up over 2% today. The commodity jumped on reports that gulf oil producers are near "max outputs", meaning no supply side solution is poised to come to the rescue.

And while consumer confidence surveys have come into some question among market participants, the Conference Board consumer survey missed expectations and set a 15-month low, dating back to pre-Covid vaccine rollouts in the U.S., a reminder of how inflation is weighing on sentiment.

Nike (NYSE:NKE) was among the big losers, down nearly 7% after posting earnings that were received negatively in what Morgan Stanley called a "reset quarter". Etsy (NASDAQ:ETSY) had a second consecutive big losing day, down 8.2%, while semiconductor company Advanced Micro Devices Inc (NASDAQ:AMD) dropped 6.2%.

Energy stocks were the leaders for a second consecutive day, with Hess (NYSE:HES) up 5.6% to lead the S&P 500. Occidental Petroleum (NYSE:OXY) moved 4.8% higher after news broke of Warren Buffett's firm Berkshire Hathaway (NYSE:BRKa) continuing to add to its position in Occidental, taking its position to over 16% of the oil company.

WideOpenWest Inc (NYSE:WOW) rose 2% on reports that another infrastructure firm, Global Infrastructure Partners, was considering a bid for the company, some weeks after Morgan Stanley Infrastructure Partners was reported to be in talks with the cable company.

Cryptocurrencies joined the general risk-off sentiment, with Bitcoin down 2.9% to $20,260 as of 4pm ET, and Ethereum down 3.3%. The United States 10-Year was just about flat, down 7 basis points on the day to 3.187, while the EUR/USD dropped 0.53% to 1.0527.

Latest comments

Its like a chatty kathy doll. Pull the string and is spews recession on loop. We technically are not in a recesssion, but those holding spy puts want to be.
the banana indicator says the Market's going to turn around by tomorrow and going to a bull market
cmon biden .boost the shale oil ...opec will follow
So many scammers here trying to suggest his/her best broker.
the best broker is TD.
So....economic meltdown...The cornerstone of the American economy!
Because you keep insisting and calling it a bear market. You created one. Massive market manipulation.
Institutions are going to push for a sub 3000 s&p.
Earlier Fed's overreaction by way of stimulus to control COVID pushed markets up. Nos the same Fed has realised its own side effects namely inflation and slowing down arr threatening to bring back the same COVID like situation. Allow markets to play its own way because Fed's every interference is not without side effects
Earlier Fed's overreaction by way of stimulus to control COVID pushed markets up. Nos the same Fed has realised its own side effects namely inflation and slowing down arr threatening to bring back the same COVID like situation. Allow markets to play its own way because Fed's every interference is not without side effects
Same story for 6 months. Anything new???
the author change topic again.... haha
what happen to inflation fear easing 🤣🤣 fk in casino 🤣
what da fk happen?? just yesterday inflation fear was gone 🤣🤣 fkin casinos..Puts printing I ain't mad...next week fear will go away again 🤣 calls printing.
Stock Market is the biggest loser.
how about just increasing legal immigration instead of making all Americans poorer? increasing productivity is always a bettet solution!
looks and smells like a recession since January.
But inflation fears eased yesterday 🤣
Technically it was 3% drop since it started up 1% when the headlines here were saying, “Market soars!”
Had to fill the gap before the move North and major fund buying to close out the quarter and month end rebalancing
rebalancing has been debunked. Bonds has gone down just as much as stocks. or whatever the article said. I think that rebalancing thingy might only be those that have cash and gets fully invested
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