Dow Plunges 1,063 Points in Widespread Sell-Off Led by Tech Stocks

NEW YORK, NEW YORK - MAY 05: Traders work the floor of the New York Stock Exchange during morning trading on May 05, 2022 in New York City. Stocks opened lower this morning after closing high on Wednesday after the Federal Reserve announced an interest-rate hike by half a percentage …
Photo by Michael M. Santiago/Getty Images

Stocks fell sharply in U.S. markets on Thursday morning, led by the technology and consumer discretionary sectors.

The Dow Jones Industrial Average fell by 1,100 points, or around 3.12 percent, in morning trading. The S&P 500 dropped 3.56 percent. The tech-heavy Nasdaq Composite plunged by nearly five percent. The Russell 2000 index of smaller companies fell four percent.

The declines in the major indexes were more than enough to erase Wednesday’s gains. Stocks soared after Federal Reserve chair Jerome Powell signaled that interest rate increases larger than 50 basis points were not being considered by Fed officials.

The Nasdaq’s decline is the worst since June of 2020.

All 11 sectors of the S&P 500 were down. The worst performing was consumer discretionary, which dropped 5.8 percent. Within the sector, automobile stocks were down 7.64 percent and internet and direct marketing stocks were down by 7.8 percent. The information technology sector fell 4.9 percent and communication services declined by 4.1 percent.

Every stock on the Dow was in negative territory Thursday morning. The best performing were Merck, which lost 0.56 percent, and Coca-Cola, which was down by 0.72 percent. The worst performing was Salesforce, off by 6.87 percent.

The yield on the 10-year Treasury rose to 3.035 percent, topping three percent for the first time since 2018. The yield on the 5-year rose to 3.008 percent, also the highest since 2018. Yields move the opposite direction of prices, so a rising yield indicates investors putting a lower value on U.S. government bonds. That likely reflects the idea that inflation will remain strong and the Fed will have to raise rates aggressively.

Yields on Treasuries with terms shorter than 1 year fell, indicating a rise in their prices.

 

.

Please let us know if you're having issues with commenting.