The exciting start to Wall Street 2022 was delayed. Shares soared, and investors remained uneasy about the Fed and corporate profits. The Dow Jones industrial average closed at 67.77 points at 34,297.73, down 0.2 percent overall. The S&P 500 closed at 53.68 points; At 4,356.45, a total of 1.2 percent. Nasdaq closed at 13,539.29; Lost 315.83 points, down 2.3 percent overall. This was the second day in a row when the markets opened sharply.
Consequently, the loss was suffered throughout the morning. The Dow fell more than 1,115 points; however, the session ended with minor additions. Meanwhile, the S&P 500 made its most significant overnight return; After the 2008 financial crisis.
Markets have been turbulent for weeks. Significant indices closed below 12 in the last 15 days. The S&P 500 lost nearly 9 percent of its value in the previous month; The Nasdaq has almost 15 percent. Analysts say market movement stems from a triple dose of uncertainty; Which includes geopolitical tensions, monetary policy, and a less inspiring profit season. Investors are worried that any of them could lead to a spiraling rise in prices. People risk their portfolios somehow; They take their most aggressive bets and back off.
Investors were shocked by those expectations; That the Federal Reserve could have tightened monetary policy more aggressively; Than planned initially for decades to combat high inflation. They expect policymakers to halt the bond-buying emergency program that revived markets in 2020-2021. Interest rates are also likely to rise in March.
Wall Street and Stock Market
Although investors knew the risks would be in a rising rate environment, it shocked the market. Several leading investment banks believe that market volatility is unlikely for the federation to scrap the game plan. Bank of America and Goldman Sachs said in recent days that they expect a more daring central bank; Monetary policy is, therefore, likely to tighten further. The latest wave of COVID-19 infections is aggravating the economy.
Traders master corporate results as well. Shares of General Electric fell 6 percent. This is after a $3.8 billion loss recorded in the fourth quarter; The reason was mainly the costs of the supply chain crisis. Verizon and 3M have risen and fallen; Despite a better-than-expected income. Oil markets continued to decline year-on-year negative trends. Russia’s invasion of Ukraine and growing tensions in the Middle East have put pressure on prices. West Texas Intermediate oil, the U.S. benchmark for oil, rose $85.17, or 2.2 percent. Brent crude was at $87.85, up 0.78 percent.
Many traders are concerned about how Russian-Ukrainian developments may affect the global economy, especially in times of energy crisis. However, stock exchanges generally view geopolitical conflicts as insignificant. The U.S. economy is strong. However, the stock market needs to withstand this potential event.
Shares of Tesla fell 11.6%; Despite Tesla’s assessment of the top and bottom lines in the fourth quarter. The company has warned that supply chain problems could limit production by 2022. Also announced that there will be no new models debut this year, which frustrates some Wall Street analysts. Netflix rose 7.5% since Bill Ackman revealed he bought more than 3.1 million shares; This made him a top-20 shareholder. Bill said he started buying the drop on Friday. Netflix has seen strong sales due to a slowdown in subscriber growth.
Intel fell 7%. However, the company reported better-than-expected fourth-quarter revenue. Intel’s most prominent business, Client Computing Group, fell 7% to $10.1 billion. However, it still surpassed the average estimate of analysts at $9.6 billion.