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Stock Market Today: Dow Falls on Tech Tantrum as Powell Tees Up Larger May Hike

Published 04/21/2022, 04:15 PM
Updated 04/21/2022, 04:23 PM
© Reuters.

By Yasin Ebrahim

Investing.com – The Dow stumbled Thursday as tech returned to the firing line after Federal Reserve Chairman Jerome Powell teed up the prospect of a 50 basis-point hike at May meeting.  

The Dow Jones Industrial Average slipped 1%, or 368 points, the S&P 500 fell 1.5%, the Nasdaq slumped 2%.

"I would say that 50 basis points will be on the table for the May meeting," Powell said in an IMF panel discussion Thursday.

The Fed Chairman didn’t shy away from hinting that the central bank could hike aggressively at the start of the tightening cycle, by front-loading 50 basis-point rate hikes at future meetings.    

U.S. Treasury yields were quick to respond, with the 10-year Treasury yield rising close to 3%, pushing growth corners of the market including tech lower.

Meta, formerly Facebook (NASDAQ:FB) led the decline in big tech, falling 6%, while Google-parent Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN),  Microsoft  (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) also ended the day lower. 

Netflix (NASDAQ:NFLX), which posted its biggest one-day decline since 2004 on Wednesday, fell more than 3%. Famed investor Bill Ackman, who bought the dip in Netflix in January, said his hedge fund Pershing Square had exited its position at a loss.

Tesla (NASDAQ:TSLA) proved the exception to the broader market selloff after the electric vehicle maker reported quarterly results that beat analysts’ expectations on both the top and bottom lines despite supply chain and input cost pressures.

“[T]hese 'Cinderella-like' numbers and good guidance in a brutal supply chain backdrop speaks to an EV demand trajectory that looks quite robust for Tesla throughout 2022 with a massive 2H ahead,” Wedbush said in a note.

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Airline stocks racked up gains as stronger-than-expected results from United Airlines (NASDAQ:UAL) and American Airlines (NASDAQ:AAL), stoked optimism about a pick-up in travel demand.

“What stood out from the [United Airlines] earnings release was the record revenue guide for the June quarter,” Deutsche Bank said in a note. “Furthermore, the company reiterated full year profitability for 2022.”

AT&T Inc (NYSE:T), meanwhile, was also in the ascendency, up more than 2%, after the telecom giant reported first-quarter results that topped Wall Street estimates.

Energy also dragged the broader market lower, falling more than 3%, weighed down by weakness in Baker Hughes (NASDAQ:BKR), APA (NASDAQ:APA), and Devon Energy Corporation (NYSE:DVN).

Latest comments

fed same sh**t
The Biden bump!
can fed do more innovative decisions
Dufus patrol at work in DC. This administration is destructive
If Powell is acting chair, can the Fed actually do anything, legally?
If we have to have the Fed, they need to be in for one term, but on a rotating basis like the Senate.Plus, they cannot own any stocks during the time on the Fed, and up to a year or two afterwards.
wtf FED!
The federal reserve needs to be dissolved.  They have turned stocks from investing in companies to gambling on what the federal reserve will do with interest rates.
why the ******did Powell announce before the announcement. Not what Greenspan would do
these fed punks should be told to keep shut and just speak on the day of the meeting. period.
And meetings should be live. On C-SPAN.
10 year bond rates have to be higher then the inflation rate to curb further inflation. that means we are nowhere close enough to have high interest rates have to go. hold onto your hat because things are going to get dicey in the next year
Who says the price of 10 year bonds needs to be higher inflation.  If keeping bond rates high requires us to crash the market then we should just tell the bonds to go eat it.
Steve is correct but your right in that it disnt have to happen this way. Inflation has run rampent for the past 18 months, all the while the feds called it transitory. I never seen the feds gamble with the economy in such a way. Now they have finally opened up their eyes and they have to act agressivly. The two year crossed the ten year a few weeks back, which points to recession. So we all better hold on, it doesnt boad well for the market.
We knew that at least a month ago, so nothing new!
i m buying commodity stocks
powel ***
Cash is King!!!!
Cash is now losing 7.5% right now.
yep. Cash is trash right now. Commodities are king.
PLATINUM will be king. PLG company will be king accordingly.
Can you not write something what makes sense ? Why do you waist your time with this? You don't really know what happening?
The federal reserve is a useless organization
No, they are not for themselves. For the others? who cares of them?
The slaughtery is coming to the Bullish Chartists, The Forever Bullish Market is ending...
And Fed comments outside of Fed meetings should be done outside normal trading times.
In Fraudistan is everything allowed.
Good point.
End the Fed.
The hike was expected. If anything, he said he would aim for maybe 1 or 2 hikes this year. So. The 3 we are expecting is not as likely.
Do you really think inflation at 8.5% will come down after 2 more interest rates leaving rates at what 1.25% - 1.5%???? Markets are now anticipating to end the year with Fed rates closer to 2.75% (so 6 more hikes - one at every remaining Fed meeting - including a few 0.5% hikes frontloaded). Some of the more hawkish Fed members actually indicated the fed rate needs to be over 3.25% by the end of the year to get inflation back under control if it stays stubbornly over 5%. If you want inflation at the targetted 2% level - with Ukraine and China lockdowns impacting inflation even further -  you will also need a very aggressive sell-off in the Fed Balance Sheet over the next 12 months to stop inflation from getting entrenched at 5%+
Not honest to call this a "tantrum".  It is a logical reaction to abusive fed policy.
the Fed is not crashing the stockmarket.the speculators panic in overdrive when the Fed farts.
Because they can buy the losses of others.
 False.  You might not understand how it works.  There is a lot of corporate debt, carried by companies with negative earnings.  Safe yields are hard to find in stocks.  Fixed income people are looking at bonds, now... people on margin are going to be forced to justify what they hold, more than before.  It all adds up.  An age old mantra:  Don't fight the fed.
Idiotic to call this a "tantrum".  It is a logical reaction to economic sabotage, by the Democrats.
Dman that guy not dead yet get him out of office along with biden
Maybe from now on Close out all positions before Powell or anyone from Fed is about to speak ☹️
Well said agree 100%
but Biden tanked markets not Powell. Said inflation at 8.5% and he'll print some more money for Ukraine... Market took it as dump signal
If anything Powell has done everything in his power to keep the stock market inflated since 2020. Only now is he getting more hawkish after 12 months of inflation denial (probably has sold all of his own personal stock positions by now)
50 points hike was already knew .. wallstreet munipulation again. Don’t afraid .
It's a nice down move before Fed Powell announcing 50 basic points in May
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