U.S. stocks on Wednesday (27) there was an unusual selling news, the three major indices have fallen more than 2%, the Dow fell 633 points or 2.05%, the S&P 500 fell 2.57%, the Nasdaq fell 2.61%, the largest single-day decline since October 28 last year.
The VIX panic index, which represents market risk, surged 61% to 37.21 points in a single day, the highest peak since October 30 last year, highlighting that investors interpreted Wednesday’s overall decline in U.S. stocks as the end of a wave of rallies, not ruling out the possibility of at least a 10% correction.
On Wednesday, the Federal Reserve announced after its regular meeting that it would maintain its current accommodative policy, with the federal prime rate remaining at the current level of between 0 and 0.25% and continuing to purchase $120 billion of debt each month. Federal Reserve Chairman Jerome Powell said that the economy is still a long way from our employment and Inflation targets, and it is likely that substantial policy responses will be required for some Time to come.
The Fed also reiterated that the recovery of the U.S. economy will largely depend on the development of the Epidemic, including the progress of vaccination, and the existing public health crisis will continue to hamper economic activity. The market interpreted the Fed’s statement as nothing new, thus triggering disappointing selling pressure.
In terms of corporate earnings, optimistic earnings data has begun to fail to attract investors to chase prices. Microsoft reported excellent earnings after hours on Tuesday and jumped 3.7%, but closed Wednesday with a small gain of 0.25%. Netflix, which jumped more than 10% last week after the release of earnings, fell 6.88% on Wednesday. Chipmaker AMD reported better-than-expected earnings of 52 cents per share on Wednesday, but shares fell 6.2%. This shows that the investment climate in Wednesday Pi change, investors on the earnings report of the positive discount significantly.
The negative earnings report triggered huge selling pressure from investors. Boeing reported a worse-than-expected loss of $15.25 per share on Wednesday, which included a $8.3 billion charge for the grounding of the 737 Max and the delay of the 777-X program, and the stock plunged 3.97 percent on Wednesday. Starbucks shares also fell 6.5 percent Wednesday after reporting a 5 percent decline in same-store sales in the U.S. last quarter due to the impact of the outbreak.
Shares of Apple, Facebook and tesla, the three index companies expected to report earnings after the bell on Wednesday, sank 0.77%, 2.6% and 2.4%, respectively, after earnings reports failed to lift stock prices. Amazon also fell 2.8 percent.
Apple reported earnings per share of $1.68 last quarter, better than market expectations of $1.41, but the stock fell 2.8 percent after the bell Wednesday. Facebook also fell 1.16 percent after hours. Tesla reported earnings per share of $0.8 last quarter, worse than the expected $1.04, and fell 3.1 percent after the bell.
Bank stocks also became an investor pariah on Wednesday. Bank of America fell 3.59 percent, Wells Fargo fell 3.8 percent, JPMorgan fell 2.8 percent, Citigroup fell 2.48 percent and the Dow Jones financial stocks index fell 2.7 percent, underperforming the three major indices.
Wednesday’s big drop in U.S. stocks alarmed many investors, but financial markets outside the stock market did not show much volatility. For example, West Texas Crude Oil edged up 0.5% to $52.85 per barrel, showing that the real economy is not experiencing a reversal in demand. Gold futures fell 0.2% to $1,844 per ounce, showing that gold market investors do not expect economic problems.
The U.S. 10-year bond yield dipped 2.5 basis points to 1.014% on Wednesday, again without huge swings. The dollar index rose 0.48% to 90.585, but has yet to break through its recent peak of 90.86, apparently without a lot of safe-haven money coming in.
Wednesday’s stock market selloff was explained by some claiming that investors were worried about vaccinations and the progress of the epidemic, some believing it was a sign of the official end of the Gakong market, while some experts previously believed it was an epic stock market bubble that would eventually have its moment to burst, and more explaining that it was a normal phenomenon of up more profit taking.
As Wednesday’s stock market decline is comprehensive, even the stock market has always led the technology stocks also appeared huge selling pressure, want to pick up the bargain investors should rest easy, do not rule out Wednesday’s selling signal may also be maintained for some time.
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