Apple, and Microsoft Break Through Support Lines.
The Dow Jones Industrial Average declined rapidly on Wednesday along with NASDAQ which fell further away from its 50-day moving average. After reaching an all-time high earlier this week, the Dow fell by more than 600 points.
Stock Market Today
The S&P 500 fell 2.1%, while the NASDAQ composite and Dow Jones Industrial Average declined 2.7% and 2%, respectively. The Russell 2000 index also decreased 3.6%. NASDAQ traded at lower volumes, on Tuesday, while NYSE traded at higher volumes.
Fear of Rising Inflation
The Labor Department reported that headline inflation was 4.2%, rather than the 3.6% predicted by experts, and Core CPI was 3%. Core CPI does not take energy and food prices into account while calculating inflation. These were the highest reported inflation figures since September 2008. The 10-year Treasury yield jumped to 1.69% on Wednesday, up from 1.62% on Tuesday.
Dow Jones Today
Many blue chip stocks in the Dow index dropped by more than 2%. Honeywell (HON) and Home Depot (HD) were among the worst performers, each losing about 4%. Merck (MRK) and Chevron (CVX) were among the few winners, each gaining about 0.6%.
Tesla, Microsoft, and Apple
Tesla’s value declined 4.4%, settling at $589.9, for a weekly loss of 12.2%. The stock is trading marginally lower than its 40-week moving average, but higher than its 200-day moving average. Although Tesla’s stock is trading higher than its early-March low, it is still trading lower than its late-March low. The relative strength line for the company is at a 2021 low.
Microsoft’s stock is down 2.9% to $239, falling below its buy point of $246.23 and breaking through its 50-day moving average. The company’s stock cleared the flat base, which was part of a base-on-base pattern, in early April.
Apple’s stock fell 2.5% on Wednesday, closing at $122.77. On the weekly chart, this is just below the 200-day moving average and the 40-week moving average. AAPL’s stock had broken through its 50-day moving average two days earlier. Apple’s relative strength line has reached its lowest level since July of 2020.
Bitcoins’ Decline In Prices
Elon Musk announced on Twitter that consumers would no longer be able to buy Tesla products and vehicles with cryptocurrencies, causing the digital currency’s price to plummet to nearly $53,000. On the other hand, taking the drop in the financial markets into account, the sentiment toward Bitcoin was already negative.
Earlier in 2021, Tesla purchased $1.5 billion worth of Bitcoin and sold a portion of the investment shortly before the first quarter of 2021, assisting the company in increasing profits. However, Musk stated that the company will not sell any more Bitcoin and will instead use it for transactions once its value is less volatile.
Asian Stock Markets
The Nikkei 225 in Tokyo dropped by 1.3%, while the Shanghai Composite Index slipped by nearly 0.1%. Hong Kong’s Hang Seng index tumbled 0.2%. The Seoul Kospi fell 1.5%. Southeast Asian and New Zealand markets were also down. Markets all over, on Wednesday, slumped as investors awaited data from the United States, fearing that inflation is on the rise.
The United States has been successful in controlling the outbreak of cases due to an effective vaccination programme. According to the CDC, as of Wednesday, approximately 35.4% of Americans had been fully vaccinated, with 46.4%having received at least one dose. Since January, the number of new cases reported per day has decreased by nearly 89%, with 34,705 new cases and 816 new deaths reported on May 12.