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Dow Jones Sheds Over 200 Points as S&P 500 Breaks 7-Day Winning Streak

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by Benjamin Godfrey · 3 min read
Dow Jones Sheds Over 200 Points as S&P 500 Breaks 7-Day Winning Streak
Photo: Unsplash

The vaccination campaigns of the American government have yielded good dividends as attested to by the rapid return to economic normalcy on all fronts.

As the United States stock market resumed after a holiday extended weekend, investors have taken a bearish position on major market indices, including the Dow Jones Industrial Average, and the S&P 500 (INDEXSP: .INX). While the Dow (INDEXDJX: .DJI) has shed exactly 208.98 points atop a 0.60% drop to 34,577.37, the latter dropped 0.20% to close Tuesday’s session at 4,343.54. In a surprising move, the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) inked a slight raise of 0.17% or 24.32 points to 14,663.64.

A lot of events happening have created a confluence of interest amongst investors such that the bets on key industries are declining. While the ISM Services index, a major gauge of the services sector, slowed to 60.1 in June, the unemployment rate has also risen to 5.9% against the 5.6% expected by Wall Street analysts. A major talking point is that the growth experienced generally as the US economy recovers from the COVID-19 pandemic is tapering down.

Despite these concerning metrics, we are safe to say that the American economy is robust as investors are generally unrelenting in growth stocks which is reflected in the major indices like the Dow Jones and the S&P 500.

“The US economy is booming, but this is now a known known, and asset markets reflect it. What isn’t so clear anymore is at what price this growth will accrue,” Michael Wilson, chief US equity strategist at Morgan Stanley, said in a note. “Higher costs mean lower profits, another reason why the overall equity market has been narrowing… equity markets are likely to take a break this summer as things heat up.”

Selloffs in firms like newly listed DiDi Global Inc (NYSE: DIDI), and JPMorgan Chase & Co (NYSE: JPM) contributed towards the plunge in the top indexes.

Dow Jones and S&P Losses Does Not Negate the US Economy’s Growth

The vaccination campaigns of the American government have yielded good dividends as attested to by the rapid return to economic normalcy on all fronts. At present, as many as 331 million doses have been given, with approximately 157 million people vaccinated, accounting for 47.9% of the population fully vaccinated thus far according to Our World in Data.

Part of the dividends of these is the average growth of the key sectors which makes up the S&P 500, an index that has grown by almost 16% year to date. According to a CNBC Market Strategist Survey summing up the forecast on the 500-stock index, we are looking at a yearly close of 4,276. Though this is a little off the top from its current position, it actually shows how resilient the economy can be when compared to how the pandemic offset major economies and their global stock market ecosystems.

Amid the battle for balance, analysts from American multinational investment bank and financial services firm, Citigroup Inc (NYSE: C) believe a healthy market may push the Feds from lifting the soft policies in place to help heal the once ailing economy and they have communicated this to their clients.

Business News, Indices, Market News, News
Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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