Dow Jones slides 200 points as shares of Disney, Pfizer and Walgreens fall to their lowest levels in 52 weeks
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Risk aversion prevailed again on Wall Street on Wednesday, as many high-profile names fell to their lowest levels in more than a year and big tech stocks suffered a more than $200 billion tumble.
Wednesday was a bad day for the big tech stocks.
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key facts
The Dow Jones Industrial Average fell 198 points, or 0.6%, while the S&P 500 and the Nasdaq index fell 0.7% and 1.1%, respectively.
Shares of Disney, Pfizer and Walgreens, three of the 30 constituents of the Dow Jones Industrial Average, fell to their lowest price in more than a year on Wednesday.
The seven big tech stocks that have appreciated this year were also lower, with the group losing nearly $240 billion in market value on Wednesday, led by Apple and Nvidia’s 4% and 3% declines, respectively.
The drop came after the Institute for Supply Management’s US services index revealed that prices paid by companies in the services sector rose 2.1% last month, a worrying sign of flat inflation as investors continue to react badly to any sign that the Reserve Bank The Fed may keep interest rates. higher for longer.
“The ISM index has reinforced all the fears that have roiled stocks for weeks,” said Adam Crisavoli, founder of Vital Knowledge, explaining that the Fed will not react kindly to “static inflation” and that the subsequent rise in bond yields will hurt valuations of other stocks.
Surprising fact
Wednesday was the third worst day for Apple shares in 2023.
Crucial quote
“The two big challenges for the Fed right now are the risks that inflation may take hold and the risks that the consumer may stumble when excess savings dry up,” wrote Jeffrey Roach, chief economist at LPL Financial, warning investors of the “tough ride” ahead. .
What should be monitored?
The release of the Bureau of Labor Statistics reading of the August Consumer Price Index, the most-followed measure of inflation, will highlight how the Fed battles over inflation progress. Crisavoli predicted that “equities are eyeing a dismal second half” of September if the consumer price index comes in above the 4.7% annual inflation expected by economists.
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