The Dow Jones Industrial Average, NASDAQ, and S&P 500 indices all dropped on Tuesday after Treasury Secretary Janet Yellen spoke to the Chamber of Commerce concerning higher taxes and unions. The Dow dropped 267 points, adding to Monday’s losses.
Stock Market Today
The S&P 500 fell 0.9%, while the NASDAQ composite and Dow Jones Industrial Average declined 0.6% and 0.8%, respectively. The Russell 2000 index also decreased 0.7%. NASDAQ traded at higher volumes on Tuesday, while NYSE traded at lower volumes compared to those on Monday.
Janet Yellen on Taxes and Unions
Janet Yellen, speaking to business leaders at the Chamber of Commerce on Tuesday, supported and listed the benefits of higher taxes and unions. She believes that higher taxes can play a critical role in supporting stimulus measures in the United States. She contended that corporate taxes are at an all-time low, accounting for only 1% of GDP, and that businesses can contribute more to the nation’s well-being by paying their “fair share.”
The treasury secretary also stated that, despite increased productivity, wage growth for low-wage earners has been minimal over the last decade. She pointed out that the cause of this phenomenon is a loss of bargaining power among workers. Although unions play an important role in addressing this issue, the government should also work on other solutions.
Dow Jones Today
Many blue chip stocks in the Dow index fell by more than 1%. Walmart (WMT) and Boeing (BA) were among the best-performing stocks, rising by 2% and 0.4%, respectively. Chevron (CVX) was one of the biggest laggards, following a difficult day for energy stocks, falling nearly 3%.
Disney, Tesla, Walmart, JP Morgan and Goldman Sachs
Disney (DIS) announced its Q2 financials on Friday, following which its stock slumped. It fell 0.2% on Tuesday, continuing its downward trend. The media conglomerate had predicted a flat base with a buy point of $203.12. Its recent slump, however, has broken through the bottom of the base. Because it is currently 17% off the left side, the pattern with a flat base is no longer relevant.
Tesla (TSLA) finished the day at $577.87, up 0.2%, just missing a loss after reaching its 200-day moving average. After displaying a promising outlook, the stock has begun to lag behind other high growth and EV stocks. This month, the stock has lost nearly 19% of its value.
Walmart (WMT), on the other hand, is among the top performers, rising by about 2% backed by the strength of its earnings. The company was able to recover and reach its 200-day moving average once more.
JP Morgan (JPM) and Goldman Sachs (GS) were down 1.4%and 1%, respectively, on Tuesday. Both stocks remain within their respective buy ranges, with buy points from a flat base of $161.79 and $356.95, respectively.
Bitcoin’s Decline In Prices
Bitcoin is currently trading around $41,000, up from a low of $40,599.88. On Monday, the digital currency briefly recovered, reaching $45,700 before falling again.
Elon Musk has stated that Tesla will not accept Bitcoin as payment for its electric vehicles due to environmental concerns. Tesla had invested $1.5 billion in the infamous cryptocurrency before selling the majority of its holding. This update prompted investors to liquidate their crypto holdings.
Asian Stock Markets
The Nikkei 225 in Tokyo dropped by 1.53%, while the Shanghai Composite Index slipped by nearly 0.41%. The Hang Seng index, in Hong Kong, increased by 1.42%. The Seoul Kospi rose 1.23%.
The United States has been successful in controlling the outbreak of cases due to an effective vaccination programme. According to the CDC, as of Tuesday, approximately 37.5% of Americans had been fully vaccinated, with 47.7% having received at least one dose. Since January, the number of new cases reported per day has decreased by nearly 89%, with 27,506 new cases and 733 new deaths reported on May 18.