Why DOW plunged 666 point today?


Today, DOW plunged 666 point, 2.54% today? S&P fell 2.12% and NASDAQ 1.96%. Amazon to certain extent saved Nasdaq. It’s the largest weekly loss for DOW since Brexit on June 24, 2016.

Why did it happen?  There are so many factors and you ask the strategists and they will give their own opinion. However, let me brief here:
1. U.S treasury yield shot up after better job report anticipating more inflation ahead expected 180K vs. actual 200K job.
2. The above could trigger more than 3 rate hikes planned by FED.
3. The big tech companies reported their earnings yesterday. More details on my blog..
  • Google disappointed with earnings, Microsoft reported quarterly profits that modestly beat expectations.
  • Apple was good but next quarter projection is not good. 
  • BABA was good but missed earnings eastimate. 
  • Amazon was exceptional but not to forget that it benefited about $680 millions this quarter due to interest rate change. 
4. The most important point according to me: After the major tech earnings, there is no immediate catalyst that can zoom the market right at the moment. The big fish knows that and they took the opportunity to take profit. This time the buyers remained on the sideline, they probably think market may come down further, better to wait and watch. 

I do not see reasons to be panicked at this point. If investors have cash available then this may bring good buying opportunities. Also, losers can be sold to invest on companies with better potential. But it’s dangerous to jump onto the ship at once as you never know any storm is waiting...

Comments

Post a Comment

Popular Post

Shesa's JUN 2025 Investment Blog

By Shesa Nayak U.S. Stock Market Update   The U.S. stock market had an incredible month of May. The S&P 500 added more than 5% in May, while Nasdaq was the star performer blasting 9.5% . Most of the gains were driven by tech and AI stocks. Despite tariff concerns, strong corporate earnings (about 12.5% Q1 growth) and a stable labor market supported stock market optimism. After a  marathon run in May, the U.S. stock market in June has shown resilience amid trade tensions, economic uncertainties and high intensity of Geopolitical tensions .  Israel, Iran War : Israel bombarded Iran and killed many of their senior leaders and Iran retaliated. The war intensified over the weekend between both nations. Israel has also attacked some of the oil fields. Wall Street was jittered last Friday due to the war. The reason is, if both these countries continue to battle then it may impact oil supply and oil prices would go up. Lat Friday, crude oil jumped around 10%. The worry ...
Read more

U.S Stock Market Weekend Update - 5|31|25

The month of May ended with a spectacular market performance. The S&P 500 added more than 5% this month, while the Nasdaq rocketed 9.5% in that time. Both are on track to notch their best months since November 2023. The Dow Jones gained 3% on the month. For the week, the S&P 500 advanced 1.5%, while the 30-stock Dow is up 1% and  Nasdaq went up 1.9%. The biggest ever was another great earnings report. I will write about it later. On the economic front, the Consumer Confidence Index for May 27, 2025, rose to 98.0 from 85.7 in April. This is the highest ever increase of consumer confidence in a single month . The Federal reserve - FOMC minutes  from May 7, FOMC that showed a cautious approach due to increased economic uncertainty. Officials noted solid economic growth and labor market but highlighted rising risks of higher inflation and unemployment, partly due to tariff uncertainties. The last three months inflation has been receding but FED is...
Read more

Shesa's Weekend Update - 6|29|25

We saw a fantastic week for the stock market. The S&P 500 and Nasdaq hit record highs on June 27 , 2025, with the S&P 500 closing at 6,173, up 3.32% for the week, and the Nasdaq closed at 20273.46, up 4.36% . The Dow gained 2.6%. Stocks rallied due to easing Middle East tensions, trade deal optimism with China (Trump said deal was signed - framework), and expectations of Federal Reserve rate cuts.  There were  211 new small-cap stocks added to the Russell 2000 Index on June 27, 2025 which will start trading in Russell index starting tomorrow, Jun 30.  A glance to the Economic Report last week The Manufacturing PMI index came at 52 vs.51 expected. The Services PMI came at 53.1 vs. 53 expected. All comfortably above 50, signaling ongoing expansion in U.S. economic activity. The economy remains on solid footing. The Consumer Confidence Index for June 2025 was released on Tuesday, June 24, 2025. It dropped to 93.0 from 98.4 in May, below the expected 99.4.  Per...
Read more