Another market selloff sees the S&P 500 post its worst day since June 2020
Target has joined the long list of retailers showing decreasing profit margins on the back of increasing input costs, which factored in to already weakening sentiment in equity markets.
The S&P 500 posted its worst session since June 2020 with the tech sector taking the brunt of the losses, while the Nasdaq shed another 4% on Wednesday.
(Video Transcript)
Wall Street close
Let's take a look now at the Wall Street close in yesterday's session - really negative sentiment they're pricing in for the markets as you can see.
The Dow Jones Industrial Average down about 3.57%, shedding over 1160 points throughout the session. The S&P 500 had its worst day since June 2020, down just above 4% there. And the Nasdaq once again taking the heavy brunt of the losses, down about 4.73% throughout the session.
Technical analysis
Let's take a look now at some charts of this early US trade, because the negativity started yesterday before the opening bell.
We did have earnings from US retailer Target coming out throughout the morning. And like Walmart, the day before, Target announced that sales were up, but profits were down thanks to increasing costs and those tightening margins that we have seen in the markets.
Now, it was quite a negative sentiment, but it is a bit of a correction of what we've seen throughout the pandemic. We've seen a lot of evaluation in a lot of these shares, especially tech shares, throughout the pandemic and it's kind of a situation where we've seen that decline and getting to more sustainable levels.
As you can see here, the S&P 500 now really undoing those gains that we've seen steadily over the last week heading towards that low that we saw on Thursday last week when we saw that momentum turning. And it seems to me that every time we see a steady increase there, we see those daily gains building to the upside, we then see a day of big reversal, those sellers piling into the market as soon as we see some negative sentiment.
It looks like those sellers are really watching out for any attempt to jump into the market, looking to sell the top, and that seems to be what happened in yesterday's session once again.
So it does seem that we are stuck in this sellers market, this bear market, where any attempted recovery is met with some fierce resistance from sellers. And it only takes one day of heavy selling to undo those steady gains that we've seen throughout the week. So more negative sentiment likely to come here.
Nasdaq 100
Let's quickly look at the Nasdaq to see how that is performing.
Similar scenario here, those daily gains were mounting there, not quite managing to see those higher highs on the upside. So it was showing a little bit of reluctance from those sellers to give in some further space.
Once again, we saw that intense selling, pretty much undoing the gains for the week, heading around the low of Thursday last week.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize your opportunity
Deal on the world’s stock indices today.
- Trade on rising or falling markets
- Get one-point spreads on the FTSE 100
- Unrivalled 24-hour pricing
See opportunity on an index?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on an index?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from one point on the FTSE 100
- Trade more 24-hour indices than any other provider
- Analyse and deal seamlessly on smart, fast charts
See opportunity on an index?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
