Stock Market Today: Dow Falls on Tech Tantrum as Powell Tees Up Larger May Hike
2022.04.21 23:50
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.
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).
