Nasdaq closed up after plunging 4.9% during the day
Dow also fell more than 1000 points and then turned upward
Risk of Russia’s invasion of Ukraine strengthens risk aversion
Morgan Stanley: Winter has come to the stock market
[뉴욕=뉴스핌] Correspondent Kim Min-jung = The major indices in the US New York Stock Exchange succeeded in turning upwards all at once on the 24th (local time). The market, which had been largely bearish ahead of the announcement of monetary policy by the US Federal Reserve and the earnings release of big tech companies, closed higher as last-minute buying inflows.
On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 99.13 points, or 0.29 percent, to 34,364.50.
The S&P 500 index, which focuses on large-cap stocks, rose 12.19 points, or 0.28%, to 4410.13, and the Nasdaq Composite Index, which focuses on technology stocks, rose 86.21 points, or 0.63%, to 13,855.13.
On this day, the stock market showed a different roller coaster than in recent trading days. The stock market, which had been close to a ‘panic sell’ until the middle of the market, reversed all the declines in the second half of the market and turned upward as the buying momentum was influx. This is in stark contrast to the recent failure of intraday upward attempts.
During the intraday, the Nasdaq index increased its decline to 4.9%, but it made up for the decline and reversed its rise amid an explosion in trading volume. The Dow also fell more than 100 points before closing higher.
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Investors are paying attention to the first regular meeting of the Federal Open Market Committee (FOMC) of the year on the 25th-26th. It is unlikely that the Fed will raise rates right away at this month’s meeting, but investors are keeping in mind the possibility that the Fed will end its tapering (reducing asset purchases) earlier than planned in March, paving the way for a rate hike in March. have.
Investment bank Goldman Sachs released a report over the weekend, predicting that the Fed could respond to inflation by raising interest rates at all FOMC regular meetings starting in March this year.
Market participants saw interest rates soaring at the beginning of the year and the stock market fluctuated, but these financial market conditions are unlikely to affect the Fed’s decision.
Peter Kramer, head of insurance portfolio at SLC Management, told Reuters: “The Fed is sensitive to the stock market, but that won’t affect this meeting.” “I think the Fed might be able to rethink its policy path if it starts to make an impact,” he said.
However, some experts say that it will be difficult for Fed Chairman Jerome Powell to be more hawkish than the market is expecting.
“The Fed’s statement and press conference emphasized why the Fed should focus on the upside risks of inflation, while raising expectations that the level of achievable full employment will continue to grow,” said Krisina Gooha, deputy chief executive of Evercore ISI, in an investment note. “I will show you,” he said, judging that he wouldn’t even try to give the impression that Chairman Powell is in a hurry to tighten austerity.
At the same time, Deputy Representative Koo Ha expected that the Fed’s radical policy, which the market was concerned about, would not materialize. These include the sudden suspension of asset purchases in January, quantitative tightening (QT), and a 50bp (1bp = 0.01% point) rate hike.
The dominant analysis in the market is that the sell-off of stocks has not yet been completed.
Michael Wilson, a strategist at Morgan Stanley, said in an investment note that “winter is here” in the stock market, expecting the stock market to continue to sell for a while.
Wharton School professor Jeremy Segal told CNBC that “there’s going to be a lot more pain,” he said.
Investors are also watching the possibility of a war between Russia and Ukraine. The US and British governments have decided to prepare families of embassy employees in Kiev, the capital of Ukraine. As the possibility of a Russian invasion continues, it is interpreted as a measure to minimize damage in the event of a situation.
Uncertainty and rising tensions over Ukraine have put further pressure on the already sensitive market ahead of a regular meeting of the Federal Open Market Committee (FOMC), which could hint at the Fed’s tightening.
Michael Hewson, chief market analyst at CMC Markets, told Reuters: “The situation in Ukraine is what I’m most concerned about. Investors have been buying low for the past 12 years.
Netflix (NFLX) also showed a sharp weakness today. Netflix, which plunged 22% on the 21st, fell 2.60% to $387.15. During the day, Netflix’s stock price fell by 47% from its peak in November last year, trading at its lowest level since April 2020.
Shares of Tesla (TSLA) sank below $900 during the day, then fell 1.47% to close at $930.00. Tesla is expected to release its fourth quarter results on the 26th.
IBM (IBM), which releases earnings after the market close, fell 0.29%, and Apple (AAPL) fell 0.49%. Microsoft (MSFT) and Amazon.com (AMZN) rose 0.11% and 1.33%, respectively.
Social media SNAP fell 1.06% after downgrading its rating on Wedbush Securities. Wedbush downgraded Snap from ‘outperform’ to ‘neutral’ and set a target price of $36, lower than the previous $56.
Meanwhile, shares of Peloton (PTON) rose 9.79% as activist fund Blackwell’s Capital called for the sale of Peloton and the sack of CEO John Foley.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX), also known as the ‘Wall Street fear index’, rose 3.19% to 29.77 at the close of the New York Stock Exchange.