Wednesday saw a significant downturn in the US stock market, with the Nasdaq Composite experiencing a sharp 3% dip. This decline was largely attributed to a plunge in semiconductor stocks, particularly Nvidia and AMD, both falling around 7%. The sell-off followed new export restrictions on Nvidia chips to China, adding to existing investor anxieties.
Adding to the negative sentiment, the CNN Money Fear and Greed Index remained firmly in the “Extreme Fear” zone, registering a reading of 14.4. This indicator reflects a prevailing sense of pessimism among investors, further contributing to the market’s downward trajectory.
Federal Reserve Chair Jerome Powell’s comments linking rising tariffs to higher inflation and slower growth also fueled the market’s decline. Powell’s statement emphasized the Fed’s lack of intention to intervene and mitigate market losses, leaving investors to grapple with the economic uncertainties.
Despite the overall negative trend, some companies reported positive news. Abbott Laboratories announced upbeat first-quarter adjusted EPS results, and Travelers Companies also exceeded expectations in their first-quarter earnings report. Economic data provided a mixed picture, with industrial production falling 0.3% in March, while retail sales showed a robust 1.4% month-over-month increase.
The broader market reflected the negative sentiment, with significant losses across various sectors. Consumer discretionary, information technology, and communication services were the hardest hit. Energy stocks, however, bucked the trend, closing higher.
The Dow Jones Industrial Average closed down approximately 700 points, settling at 39,669.39. The S&P 500 also suffered, falling 2.24% to 5,275.70. Investors now await earnings reports from several key companies, including Netflix, UnitedHealth Group, and D.R. Horton.
The CNN Business Fear & Greed Index, a gauge of market sentiment based on seven indicators, ranges from 0 (extreme fear) to 100 (extreme greed). Its current reading underscores the significant apprehension currently gripping the market. The index’s movement provides valuable insight into investor psychology and its potential impact on market fluctuations.
