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The Nasdaq Leads the Stock Market Lower as the Bear Market Rally Pauses

Stock Markets Jun 27, 2022 04:12PM ET
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© Reuters.

By Daniel Shvartsman

Investing.com -- Leading U.S. stock market indices started the week on a down note, as the brief euphoria from last week's rally faded amidst renewed inflation and commodity pricing fears.

The Nasdaq Composite was the big loser on the day, down 83 points or 0.72%. The S&P 500 closed down 0.3% while the commodity-exposed Dow Jones Industrial Average drifted 0.2% lower.

This comes with market participants sizing up last week's counter-trend rally, and also perhaps getting ready for the slower summer trading season. Morgan Stanley's Michael Wilson stated in a note this morning that, "we continue to believe any near-term rally is nothing more than a bear market bounce with lower lows ahead," citing the headwinds of Fed policy, inflation, potential recession, and downwards corporate earnings revisions.

The commodity complex, whose sell-off drove optimism last week that perhaps the Fed would find reason to slow their hawkish run, saw mixed trading today. Crude Oil and Brent closed up, 1.8% and 1.7% respectively, as the Group of 7 Nations was on watch for further actions against Russia and Russian oil. US Wheat Futures closed trading 1.9% lower and US Cotton #2 Futures closed down 4%, at a 9-month low of 94.05 cents a pound. Oil is in the spotlight as the EIA continues to struggle with delivering its U.S. weekly report due to hardware failure.

Energy stocks led the way in Monday trading as they recovered from several rough sessions. Valero Energy (NYSE:VLO) closed up 8%, while Devon Energy (NYSE:DVN) finished 7.6% higher, the pair pacing the S&P 500, with sell-side shop Piper Sandler considering refinery pressure likely to sustain. Electronic Arts (NASDAQ:EA) and Etsy (NASDAQ:ETSY) led on the downside, trading 3.5% lower a piece, with Etsy in specific receiving an analyst downgrade due to a "worsening near-term macro outlook."

The big earnings after the bell was due from footwear giant Nike (NYSE:NKE), which traded down 2.1% in the run-up to the earnings, not far above its 52-week high, with supply chains and China's covid policies looming as threats to the current outlook.

And while there was no fresh merger news before the open on today's merger Monday, Bloomberg reported that privately held crypto exchange FTX was considering an acquisition of Robinhood Markets Inc (NASDAQ:HOOD). The beleaguered stock brokerage saw its shares jump 14% on the reports. FTX's founder and CEO Sam Bankman-Fried already owns a 7.6% stake in the company, and FTX has been in the news recently for a series of crypto sector bailouts.

In that cryptocurrency sector, traders also saw a pullback from the recent bear market rally, with Bitcoin down 1.9% as of 4 pm ET and Ethereum down 2.2%.

(This piece was published at 2:42 pm ET and updated at 4:00 pm ET).

The Nasdaq Leads the Stock Market Lower as the Bear Market Rally Pauses
 

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Comments (7)
Kelly Mayer
Kelly Mayer Jun 27, 2022 7:03PM ET
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Funny how they are mentioning a bear market... and the effect these headlines have on markets... https://investing.com is now dictating the market direction. New low.
Atlantic Coast Money
Atlantic Coast Money Jun 27, 2022 7:03PM ET
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They dictate nothing. But they are leading retail bears to the barbecue.
Mecnun Leyla
Mecnun Leyla Jun 27, 2022 6:55PM ET
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hello guys
Dave Jones
Dave Jones Jun 27, 2022 6:07PM ET
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Bear market rally now is it? Interesting!
Ac Tektrader
Ac Tektrader Jun 27, 2022 5:05PM ET
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lots of people on this site don't understand how markets work and shouldn't be in them on a day to day basis. they can't understand that markets can be moved by large market makers, trader, option players and large specs, and their perception of risk. volitility in bear markets is usually greatest at the first 1 and half hrs at the open and the last 30 min at the close. stop complaining about something that has been true in most major markets and has been true for the last forty years. and take advantage of these actions. mitch is not capable of understanding .....stop being a mitch and be smart.
David Vaughan
David Vaughan Jun 27, 2022 5:05PM ET
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Maybe you're just taking it too seriously
Casador Del Oso
Casador Del Oso Jun 27, 2022 4:13PM ET
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all aboard. next stop SP500 2700-2900
Kelly Mayer
Kelly Mayer Jun 27, 2022 4:13PM ET
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3300 for now. 2700 in Sept. Record home sales, ring car prices, high energy costs and food prices all tell us inflation has not peeked. Jul 13 sp500 hits 33xx easy.
Meru Pet
Meru Pet Jun 27, 2022 4:13PM ET
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until oil goes up again...shake baby shake .. up and down and up and down...
Steffen vdm
Steffen vdm Jun 27, 2022 3:20PM ET
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Mitchel in 3, 2, 1.....
john smith
john smith Jun 27, 2022 3:20PM ET
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repetitive but I think there is truth to what he is saying.
First Last
First Last Jun 27, 2022 3:20PM ET
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john smith   Truth?  @ 2:40 pm, Mit predicted for today:  '"late trade" magic ...  Always "buying" into the close'.  Market has been flat from 2:40.  It's has not been "always".
Ronald Warren
Ronald Warren Jun 27, 2022 3:20PM ET
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First Last Mitch averages about 8.5 out of 10
Ac Tektrader
Ac Tektrader Jun 27, 2022 3:20PM ET
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lots of people on this site don't understand how markets work and shouldn't be in them on a day to day basis. they can't understand that markets can be moved by large market makers, trader, option players and large specs, and their perception of risk. volitility in bear markets is usually greatest at the first 1 and half hrs at the open and the last 30 min at the close. stop complaining about something that has been true in most major markets and has been true for the last forty years. and take advantage of these actions. mitch is not capable of understanding .....stop being a mitch and be smart.
 
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