By
Steve Muchoki
April 16th, 2024
In terms of individual company performance on Wednesday, FAANG stock all closed with losses.
The increasing inflation figures for April notably fueled a broad market sell-off, further adding to the pressures the stock market indices have been recording in recent times. The inflation situation spiked to a new high in the previous month with the Consumer Price Index (CPI) rising as high as 4.2%. This is the fastest inflation has risen since 2008.
As investors weigh in the potential impact of this high inflation rate, the stock market recorded a plunge with the Dow Jones Industrial Average (INDEXDJX: .DJI) leading the bearish rally. The 30-stock index lost 681.50 points to close Wednesday’s session at 33,587.66. This represented a 1.99% drop. The S&P 500 (INDEXSP: .INX) slumped 2.14% to 4,063.04, while the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) recorded a 2.67% loss to close at 13,031.68.
Investors took the exit as rising inflation, particularly in tech stocks can reduce corporate gains. “Investors who may have been looking for a reason to lighten up on a stock market that was up more than 10% year to date found a good one: rising inflation,” Chris Hussey, a managing director at Goldman Sachs Group Inc (NYSE: GS), said in a note as reported by CNBC.
While interest rates are still kept very low, the rising inflation may force the Feds to act and provide a cushion for the economy with a more tightened monetary policy.
“There are people who think the Fed is not just behind the curve, they’re maybe missing the point and by the time they start to play catch up, it’s too late,” Wall Street veteran Art Cashin said in a live session with CNBC’s “Squawk on the Street.”
Tech Companies Crumble in the Daily Market Session amid Sell-Off
In terms of individual company performance on Wednesday, FAANG stock all closed with losses. Facebook Inc (NASDAQ: FB) dropped 1.30% to $302.55. Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) lost 2.49% and 2.23% to close at $122.77 and $3,151.94 respectively. Netflix Inc (NASDAQ: NFLX) closed 2.04% lower to $484.98 while Google’s parent company, Alphabet Inc (NASDAQ: GOOGL) dropped 3.08% to $2,200.25.
The electric automaker, Tesla Inc (NASDAQ: TSLA) also shared in the losses closing down 4.42% to $589.89. Tesla’s underperformance has continued into the pre-market following a revelation made by the company as shared by CEO Elon Musk that the firm will stop accepting Bitcoin as a form of payment for its products. The company cites Bitcoin’s excessive energy requirement for mining as its reason for making the u-turn.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
The only cushion the market received on Wednesday came from energy stocks. Occidental Petroleum Corporation (NYSE: OXY) surged 2.41% to $25.12, while Marathon Petroleum Corp (NYSE: MPC) inked a 0.56% growth to $58.97.