Stock Market Today: Dow Sheds 1,000 Points as Tough Talking Powell Tanks Tech

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Stock Market Today: Dow Sheds 1,000 Points as Tough Talking Powell Tanks Tech
Credit: © Reuters.

By Yasin Ebrahim -- The Dow closed sharply lower Friday, driven by a meltdown in tech after Federal Reserve chairman Jerome Powell signaled that higher for longer interest rates would be needed to rein in inflation.

The Dow Jones Industrial Average slipped 3%, or 1,000 points, the Nasdaq was down 3.9% and the S&P 500 fell 3.3%.

Powell said the Fed’s mission to stable inflation was “unconditional,” and would require “maintaining a restrictive policy stance for some time,” even if that results in a “sustained period of below-trend growth.”

The remarks arrived just as the latest data showed that personal consumption expenditure , the fed’s preferred inflation gauge, slowed in July.

The Fed chief didn’t provide any fresh clues on whether the central bank is leaning toward a 50 or 75-basis-point rate hike but said the decision would “depend on the totality of the incoming data and the evolving outlook.”

Treasury yields climbed following the pushback from Powell, denting sectors of the market with higher valuations such as tech.

Alphabet (NASDAQ: GOOGL ), down more than 5% led big tech lower, followed by Meta Platforms (NASDAQ: META ) and Microsoft Corporation (NASDAQ: MSFT ).

Chip stocks were also hit hard as NVIDIA Corporation (NASDAQ: NVDA ), ON Semiconductor (NASDAQ: ON ) and Marvell Technology Group (NASDAQ: MRVL ) fell sharply, with the latter further pressured by guidance that fell shy of Wall Street estimates.

Marvell‘s guidance was weighed down by “supply issues [that] continue to constrain the company’s ability to ship to customer demand, particularly in Enterprise Networking and increasingly in Data Center (Cloud),” Goldman Sachs said in a note on Friday.  

Bank stocks were pressured by a deeper inversion in the Treasury yield curve, which keeps a lid on lending margins, paced by a decline in Synchrony Financial (NYSE: SYF ), SVB Financial Group (NASDAQ: SIVB ), and T. Rowe Price Group (NASDAQ: TROW ).

On the earnings front, Workday (NASDAQ: WDAY ) eased from session highs, but was still up about 3% after reporting quarterly results topped Wall Street estimates.

Ulta Beauty Inc (NASDAQ: ULTA ), meanwhile, delivered upbeat annual guidance and quarterly results that were ahead of analysts’ expectations, led by a better-than-expected 14.4% jump in same-store sales amid ongoing demand for beauty products. Its shares, however, fell more than 1%.

Farfetch (NYSE: FTCH ) jumped more than 26% after reporting a narrower than expected loss, driven by revenue that topped analyst estimates, underpinned by a boost from acquisitions.

In other news, Moderna (NASDAQ: MRNA ) filed a lawsuit against Pfizer Inc (NYSE: PFE ) and BioNTech (NASDAQ: BNTX ) alleging that the duo had copied its messenger RNA technology when developing the first Covid-19 vaccine.

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