By
Steve Muchoki
April 16th, 2024
The US stock market seemed to be under pressure, losing out on all major sectors as key inflation data draws near.
The US stock market experienced a sizable drawdown on Tuesday July 12th ahead of a crucial June inflation report. For instance, the Dow Jones Industrial Average traded 0.62% lower, dropping 192.51 points to close at 30,981.33. In addition, the S&P 500 retraced 0.92% to 3,818.80, while the Nasdaq Composite slid 0.95% to 11,264.73. Commenting on the downturn of US stocks which clearly reveals investor apathy towards risk assets, Keith Lerner of Truist Advisory Services, explained:
“There’s a lack of a catalyst, a lack of a leadership right now.”
Furthermore, the Truist Co-Chief Investment Officer and Chief Market Strategist also stated that:
“Growth is slowing and global central banks are still in tightening mode and I think that’s concerning the markets.”
Lerner’s observation comes as US stocks struggled during much of the trading session, only to dip in the final hour. Meanwhile, all three major indexes fluctuated markedly between gains and losses during that time as well. For example, the Dow went up by as much as 172 points, and then crashed by more than 300 points.
Stock Market Run-Through as June Inflation Report Looms
A number of tech stocks also vacillated between gains and losses during the session before eventually surrendering all gains realized. They include PC software giant Microsoft (NASDAQ: MSFT) as well as cloud-based software firm Salesforce (NYSE: CRM). Each of the duo’s stocks fell by more than 4% during trading. Other tech stocks to also see drawdowns include e-commerce powerhouse Amazon (NASDAQ: AMZN) and social media giant Twitter (NYSE: TWTR). Amazon declined more than 2% while Twitter initially gave up more than 11% in stock value after Elon Musk terminated his acquisition deal. However, the microblogging platform was able to eventually recoup gains of 4.3%.
There was a rally among airline stocks following positive news from American Airlines (NASDAQ: AAL) regarding its impending Q2 revenue. AAL climbed approximately 10% after the company forecast a higher second-quarter revenue haul year-over-year than that of 2019. Other stocks in the same industry to also see substantial gains include United (NASDAQ: UAL), Delta (NYSE: DAL), and Southwest (NYSE: LUV). The trio advanced by 8.1%, 6.2% and 4.6%, respectively. In addition, aircraft manufacturing and engineering company Boeing (NYSE: BA) climbed 7.4% on the back of record-high deliveries since March 2019.
The cruise line business also saw positive developments, with Norwegian (NYSE: NCLH) and Carnival (NYSE: CCL) gaining 5.8% and 7.5% respectively.
The energy sector also had losses as oil prices dipped amid fears of a global market stagnation. For instance, Halliburton (NYSE: HAL) and Devon Energy (NYSE: DVN) each retraced by over 2%.
Other Relevant News
Besides the US stock market drawdown and anticipated inflation report, other key developments are taking place this week. For instance, several companies are slated to release quarterly earnings, with beverage giant PepsiCo (NASDAQ: PEP) beginning proceedings. The company reported better-than-expected earnings and has now raised its revenue outlook for the rest of the year.
Meanwhile, the dollar index recently strengthened to a high of 108.56, which saw the US dollar attain parity with the euro. This dollar and euro parity is happening for the first time in 20 years as the euro continues to be impacted by recession fears in Europe.