The S&P 500 Index Declined by 2.6%. What about the Dow?

 

U.S. stocks continued trading in the red on Thursday after the release of disappointing earnings data from tech giants. Investors fear that equities have become overvalued. As a reaction on the negative sentiment, the U.S. dollar rallied to its highest point since September. Meanwhile, Treasury yields tumbled down.

 

Tesla Inc and Facebook Inc. both plummeted down after reporting results, along with ETFs that track major stock gauges. Furthermore, the S&P 500 Index recorded its worst cash session since October, with the gauge plunging by 2.6% after Federal Reserve officials left their main interest rate unchanged on Wednesday. The agency hasn’t promised any more aid for the economy either.

 

The widespread selloff on the market dragged lower all 11 groups in the benchmark stock gauge.

 

The turmoil also touched retail traders who are becoming a dominant force on the market. Shares of AMC Entertainment Holdings Inc. and GameStop Corp. rallied, and analysts questioned whether there’s any rationale behind the moves.

 

EU Stocks

 

Meanwhile, the Stoxx Europe 600 Index plummeted down the most in five weeks. Particularly, as the European Union and AstraZeneca Plc argued about vaccine delivery delays. A European Central Bank official stated that the markets underestimated the odds of a rate cut, causing the euro to drop. Officials in the U.K. also declared new rules to try to hinder the spread of coronavirus. While Germany cut its 2021 economic growth forecast from 4.4% to 3%.

 

Overall, the S&P 500 Index declined by 2.6% on Thursday, while the Stoxx Europe 600 Index tumbled down by 1.2%. The MSCI Asia Pacific Index shaved off 0.8%, and the MSCI Emerging Market Index lowered by 1.3%.

 

Check-out FinanceBrokerage’s Comprehensive Review on Libertex

 

Investors study a spate of earnings releases for clues about the condition of the corporate world. Meantime, an extended run higher for shares has reversed this week. According to Federal Reserve Chairman Jerome Powell, the American economy was a long way from full recovery.

 

What do stock market analysts think? 

 

Seema Shah, the chief strategist at Principal Global Investors, noted that it was always doubtful the agency would announce any new actions this month. After a few weeks of Fed officials pushing back on the monetary tightening narrative, it was expected to hear Powell reassert the message that tapering is not on the agenda for this year.

 

Furthermore, speculation that hedge funds will be forced to reduce their equity holdings drives the stock selloff. Matt Maley, the chief market strategist at Miller Tabak + Co, stated that retail investors make a concerted effort to bolster shares the professional investors have bet against.