Why did the Dow plunge? ‘Stagflationary shockwaves’ destroy a bear-market bounce

U.S. stocks went back on the downswing in a big way Wednesday, more than erasing the rally of the previous session and underlining warnings from some market veterans that sharp rebounds in what has so far been a down year for equities may be little more than the sort of volatile, short-lived upside rebounds characteristic of bear markets.

The Dow Jones Industrial Average DJIA, -3.57% dropped 1,164 points, or 3.6%, while the S&P 500 SPX, -4.04% shed 4% to end at 3,923 and the Nasdaq Composite COMP, -4.73% dropped 4.7%. That comes after the Dow jumped more than 400 points on Tuesday, while the S&P 500 advanced 2% and the Nasdaq rallied 2.8%.

A failure by the Cboe Volatility Index VIX, +3.49%, sometimes referred to as Wall Street’s fear gauge, to push above the mid-30 range was seen as one sign that investors hadn’t made the sort of “capitulation” that often clears the way for a sustained rebound. However, some positive market internals on the upside during Friday’s and Tuesday’s bounce have some analysts looking for some near-term upside, which could continue to confound market bears.

“Indeed, contagion from bellwether consumer earnings prints is sending stagflationary shockwaves through the market, and equities suffered another massive bout of indigestion after [Tuesday’s] Alka Seltzer moment,” he said.

This is the real reason behind yesterday's plunge.

Australia Australia Latest News, Australia Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Stocks making the biggest moves midday: Walmart, Citigroup, Paramount and moreThese are the stocks posting the largest moves in midday trading.
Source: CNBC - 🏆 12. / 72 Read more »

Morgan Stanley names 5 cheap global stocks — and gives all at least 20% upsideMorgan Stanley analysts have shared their top global stock picks in a choppy market. At least. The manager of CPODX should be fired 🚨 Bag holder alert 🚨
Source: CNBC - 🏆 12. / 72 Read more »

Stocks Keep Tanking As Growing Number Of Wall Street Experts Warn About Rising Recession RisksMarkets moved lower again on Monday, struggling to rebound from a brutal selloff in recent months that has caused tech stocks to nose-dive and pushed the S&P 500 to the edge of bear market territory. Thank you JoeBiden and TheDemocrats
Source: Forbes - 🏆 394. / 53 Read more »

Stocks fall sharply as Target's woes renew inflation fearsThe Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday. Thank Mr 🤡 Biden for crashing the market.
Source: abc7newsbayarea - 🏆 529. / 51 Read more »

Stocks had their worst day in more than two yearsIt's the fourth time in 2022 that the Dow has fallen by more than 900 points.
Source: axios - 🏆 302. / 63 Read more »

Stocks fall sharply as Target's woes renew inflation fearsNEW YORK (AP) — The Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday, as big earnings misses by Target and other major retailers stoked investors' fears that surging inflation could cut deeply into corporate profits. I was telling my wife a joke about inflation, but she didn't get it. It really fell flat. If you have to spend all you money on gasoline, other purchases will be cut back. Companies doing deliberately inflation to profit
Source: AP - 🏆 728. / 51 Read more »