Two Key Factors Tanking Stock Markets Today
US stock markets are low today after new inflation reports show that inflation is worse than expected.
US stock markets are very low today, with major drops across the top three stock market indices as inflation fears persist.
What is driving down the market today? The Dow Jones has dropped by 1.53%, losing an astounding 600 points. The S&P 500 is down as well, dropping 0.74%, followed by a drop from the Nasdaq Composite, which is down 0.39%.
The markets are down considerably from where they were at the beginning of the week, reaching record highs. But a lot has happened since then. The FOMC meeting minutes on Wednesday confirmed what many feared- that inflation is still high and is showing little sign of easing. The 3.4% US inflation rate is far from the Federal Reserve’s goal of 2%, and the stock market is feeling the pinch as investors stay away from making risky trades.
The second contributing factor to the tight stock market is the recent report of retail sales. The new data shows that retail sales are down in the United States, with consumers spending less money as they try to save in a tight economy. Households across the country bought 2.3% less in April than they did in March, demonstrating a sharper decline than expected.
Stock Market Forecast
We anticipate a low stock market for Friday as trading opens. Inflation worries will likely drive the market for the next few days, at least, carrying into next week and keeping the stock market lower than it has been in a while. As more economic reports come in the next few weeks, the traders will have these two most recent reports in mind and will be timid in their trading, especially if new data shows a more dire picture.
A few stocks still have the potential to do very well, like Nvidia, which is high after a recent quarterly report showed that the company is doing better than expected and has a bright forecast for the rest of the year.
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