Stock Market Today: Dow Slides as Tech, Energy Lead Sea of Red on Wall Street

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Stock Market Today: Dow Slides as Tech, Energy Lead Sea of Red on Wall Street
Credit: © Reuters.

By Yasin Ebrahim -- The Dow slumped Monday, as tech and energy led a wave of selling on Wall Street in the wake of growing concerns about an inflation-led slowdown in global growth.

The Dow Jones Industrial Average slid 2%, or 653 points, the S&P 500 fell 3.2% to close below 4,000 for the first time since Mar. 31, 2021. The Nasdaq fell 4.3%.

Energy fell more than 8% pressured by a stronger dollar and fresh fears over weakening demand from China as Shanghai reportedly intensified Covid-19 lockdown measures.

Devon Energy (NYSE: DVN ) was down more than 10%, Marathon Oil (NYSE: MRO ) fell more than 13%, and APA (NASDAQ: APA ) fell more than 14%.

The recent China lockdowns are expected to slow growth in the world’s second largest economy, adding to fears of a significant slowdown in the global economy at a time when central banks are on the road to tightening monetary policy to rein in inflation.

“The Covid-zero policy [in China] has throttled household spending and has not left the productive side of the economy unscathed,” Morgan Stanley said. “The risk of an extended contraction is plain to see,” it added.

Tech, meanwhile, struggled to find its footing as investors appear wary of buying the dip even as Treasury yields took a breather.

Meta (NASDAQ: FB ), Google-parent Alphabet (NASDAQ: GOOGL ), Microsoft (NASDAQ: MSFT ) and Apple (NASDAQ: AAPL ) were down more than 2%, while Amazon (NASDAQ: AMZN ) slid more than 5%.

The selling in Microsoft took its valuation below $2 trillion for the first time since June 2021.

The earnings front didn’t offer much to help improve investor sentiment as Palantir Technologies (NYSE: PLTR ) plunged more than 21% after reporting quarterly results and guidance that fell short of analysts’ estimates.

BioNTech SE (NASDAQ: BNTX ), however, bucked the broader market trend lower after its better-than-expected first-quarter results sent its shares more than 2% higher.

Uber Technologies (NYSE: UBER ) fell more than 11% as the ride-hailing company reportedly plans to scale back hiring and cut its market marketing and incentives spending, CNBC reported, citing an email from chief executive Dara Khosrowshahi to staff on Sunday.

Crypto-related stocks including Coinbase (NASDAQ: COIN ), Marathon Digital (NASDAQ: MARA ), and Riot Blockchain (NASDAQ: RIOT ) were down double digits after bitcoin fell to its lowest level since June. 

A sign of the negative sentiment on Wall Street, consumer staples, a defensive corner of the market, closed just above the flatline. 

"Consumer Staples defensive characteristics make this sector potentially attractive during market volatility and as the economy slows," Wells Fargo said.

The move below the key 4,000 level in the S&P 500 could pave the way for further pain, though the latest slump in the broader market has pushed it further into oversold levels that may trigger a short-term rebound. 

"This move today is bearish (obviously), and sets up our target range of 3600-4000 ahead- however, we would note that stocks are now very oversold and could easily produce sharp counter-trend rallies in sessions ahead (upwards of +6-10% from the lows)," Janney Montgomery Scott said in a note.  

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