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Nasdaq Composite Records 2.51% Plunge Ending Its 3-Three Winning Streak

UTC by Benjamin Godfrey · 3 min read
Nasdaq Composite Records 2.51% Plunge Ending Its 3-Three Winning Streak
Photo: Depositphotos

The economy is still reeling from the potential impact of inflation following the most recent Consumer Price Index (CPI) which topped 7% year-over-year.

The 3-day winning streak of the tech-heavy Nasdaq Composite (INDEXNASDAQ: .IXIC) was stumped on Thursday as tech stocks gave back the winnings accrued over the course of the week. The index slipped 2.51% to 14,806.81, charting the bearish course for the Dow Jones Industrial Average (INDEXDJX: .DJI) to drop 0.49% to close at 36,113.62, while the S&P 500 (INDEXSP: .INX) ended the day at a loss of 1.42% to 4,659.03.

The majority of the big technology stocks that helped the Nasdaq Composite hit its successive winning streak this week notably lost their steam. Amongst the biggest losers on Thursday is the American spaceflight company founded by Richard Branson and his British Virgin Group, Virgin Galactic Holdings Inc (NYSE: SPCE) which dropped 18.92% to $10.03 per share. Virgin Galactic’s poor performance was in part driven by the company’s announcement that it is offering a debt offering.

Electric car manufacturing giant, Tesla Inc (NASDAQ: TSLA) also cut back on its earlier gains by 6.75% to $1,031.56, Amazon.com Inc (NASDAQ: AMZN) plunged 2.42% to $3,224.28 while Microsoft Corporation (NASDAQ: MSFT) slumped 4.23% to $304.80.

The US stock market was not all about negative trends yesterday as the kick-off in the earnings season helped some key players to ink positive growths on Thursday. Delta Air Lines Inc (NYSE: DAL) saw a revival in its share price which rose 2.12% as the firm posted a positive earnings beat and revised its revenue guidance for the year. Aircraft maker Boeing Co (NYSE: BA) also grew its stock by 2.97% after a Bloomberg News report revealed that the company’s 737 Max could resume service in China as soon as this month.

Halt on Nasdaq Winning Streak Still Impacted by Inflation Fears

The economy is still reeling from the potential impact of inflation following the most recent Consumer Price Index (CPI) which topped 7% year-over-year. While this figure is at par with what analysts were expecting, it comes off as the highest CPI level since 1982. Investors must critically explore the options available to them as there are projections for more inflationary surges in the near future.

“We expect the US 10-year yield to move … to around 2% over the coming months, as investors digest the Fed’s more hawkish stance along with further elevated inflation readings. That said, we don’t expect a sharp rise in yields that will imperil the equity rally. Year-over-year inflation is still likely to peak in the first quarter and recede over the year,” UBS strategists led by senior economist Brian Rose said in a note on Thursday.

Concerns over inflations may be shrouded temporarily in the coming weeks as Wall Street will begin weighing on earnings reports from various companies. As reported by CNBC, analysts expect fourth-quarter earnings to be up 22.4%, according to Refinitiv, but guidance for 2022 from companies will likely be a key determinant for market action.

Business News, Indices, Market News, News, Stocks
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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