The New York Stock Exchange crashed on the last trading day of April. The Nasdaq fell more than 4% due to Amazon’s ‘earning shock’, which posted a quarterly loss for the first time in seven years. Major indices are expected to drop to their lowest this year and be recorded as ‘Black Friday’.
On the 29th of last month (local time), the Dow closed at 32,977.21, down 2.77% from the previous day. The S&P 500 fell 3.63% to 4,131.93, and the Nasdaq Composite fell 4.17% to close at 12,334.64, respectively. Both the S&P 500 and Nasdaq indexes reached their lowest levels for the year in terms of closing prices.
In particular, the Nasdaq Index fell 13.3% in April alone, the biggest decline since October 2008. During the same period, the S&P 500 and Dow fell 8.8% and 4.9%, respectively. Both indices were the largest since March 2020 in terms of 1-month declines.
The sharp drop on the day was due to concerns about earnings at Apple and Amazon. Shares of Apple, the No. 1 company by market capitalization, fell 3.66%, and shares of Amazon, the third largest by market capitalization, fell more than 14%. Amazon’s decline was the largest since July 2006.
Amazon reported a net loss of $3.8 billion in the first quarter after the market close the previous day. It was the first loss in seven years since the first quarter of 2015. Except for the cloud sector, most businesses did not meet the market expectations. An equity-method loss of $7.6 billion was also reflected as the share price of Rivian, an electric car maker in which Amazon owns an 18 percent stake, halved.
Apple delivered better-than-expected first-quarter results, but the outlook for the second quarter was hindered. Apple predicts that supply chain disruption will result in revenue loss of between $4 billion and $8 billion in the second quarter.
The rise in Treasury yields ahead of the U.S. Federal Open Market Committee (FOMC) regular meeting on the 3rd and 4th also contributed to the weakness in tech stocks. The US central bank (Fed) is expected to announce quantitative tightening at this FOMC by raising the key interest rate by 50 basis points (1 bp = 0.01 percentage point) and shrinking the balance sheet.
The yield on the 10-year U.S. Treasury rose more than 9 basis points during the day, rising to 2.92% a year before closing at 2.89%. The yield on two-year Treasury bonds, a representative short-term bond, also rose to 12 bps and then rose 7 bps to close at 2.70%.
Washington = Correspondent Jeong In-seol surisuri@hankyung.com
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