Nasdaq Falls 4.17% Amid Amazon Plunge... April Decline Exceeds 13% [New York Stock Market]

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Major indices on the U.S. New York Stock Exchange closed lower on the 29th (local time) as Amazon, the third-largest company by market capitalization, recorded its largest drop since 2006. The tech-heavy Nasdaq index fell more than 4%, hitting a year-to-date low. Inflation indicators remained at their highest levels in 40 years, pushing Treasury yields up to the 2.93% range.

At the New York Stock Exchange (NYSE) that day, the Dow Jones Industrial Average closed at 32,977.21, down 939.18 points (2.77%) from the previous session. The large-cap S&P 500 index fell 155.57 points (3.63%) to 4,131.93, while the tech-focused Nasdaq index dropped 536.89 points (4.17%) to 12,334.64. The small-cap Russell 2000 index also closed lower at 1,864.10, down 53.84 points (2.81%).

The decline across all indices was led by Amazon. After announcing its first quarterly loss in seven years following the previous day's market close, Amazon's stock plunged more than 14% that day, marking its largest drop since 2006. The sharp decline in Amazon's stock, the third-largest by market cap, contributed to the overall market weakness. Apple also closed down 3.66% after its management warned that supply chain disruptions could lead to greater revenue losses. Intel's shares slid nearly 7% amid concerns over its future earnings guidance.

Tesla fell 0.77% despite CEO Elon Musk stating that after selling $8.4 billion worth of Tesla shares this week to fund his Twitter acquisition, there are no further plans to sell. ExxonMobil declined 2.24% due to earnings that fell short of expectations, and Chevron also dropped 3.16%.

On the last trading day of April, major indices plunged together, closing the month on a bleak note for the New York stock market.

According to economic media CNBC, the Nasdaq index, which is in a bear market more than 20% below its previous peak, has fallen over 13% just this month. This is the worst monthly performance since October 2008 during the financial crisis. The S&P 500 slid more than 8%, marking its worst month since March 2020 when the COVID-19 pandemic spread globally. The Dow fell about 3.9% this month.

Investors on this day closely watched big tech earnings, inflation indicators, the Federal Reserve's tightening path, and Treasury yield trends. The Personal Consumption Expenditures (PCE) price index, the Fed's preferred inflation gauge, remained at its highest level in 40 years. The March PCE price index rose 6.6% year-over-year, exceeding market expectations of 6.4%. However, the core PCE price index, which excludes volatile food and energy prices, increased 5.2% year-over-year, slightly below the forecast of 5.3%.

Confirmed high inflation pushed Treasury yields higher again. The 10-year Treasury yield briefly reached the 2.93% range. The 2-year yield, sensitive to monetary policy, hovered around 2.74%.

The Fed is expected to take a big step by raising the benchmark interest rate by 0.5 percentage points at the May Federal Open Market Committee (FOMC) meeting scheduled next week. According to the Chicago Mercantile Exchange (CME) FedWatch tool, the federal funds (FF) futures market reflects a 99.1% probability of a 0.5 percentage point rate hike next month. Specific messages regarding quantitative tightening (QT), which reduces the balance sheet, are also expected to be announced.

Brian Belski of BMO commented in an investor memo, "Despite a solid earnings season, broad concerns about inflation and the Fed seem to have overshadowed positive results." According to FactSet, about 80% of S&P 500 companies that have reported earnings so far have exceeded quarterly earnings expectations.

Concerns about supply chain disruptions have resurfaced due to China's tightened COVID-19 lockdown measures. Esti Dwek, Chief Investment Officer (CIO) at FlowBank, pointed out, "The supply chain situation had started to improve, but if China's lockdowns persist longer, the situation could reverse." The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), known as Wall Street's "fear gauge," surged more than 11% from the previous session, trading around the 33 level.

Oil prices slightly declined amid concerns that China's prolonged COVID-19 lockdowns could impact demand, despite the European Union's (EU) potential ban on Russian oil imports. At the New York Mercantile Exchange, June West Texas Intermediate (WTI) crude oil prices closed at $104.69 per barrel, down 67 cents (0.6%) from the previous session.

This content was produced with the assistance of AI translation services.