Why Are Stocks Down Today?

Source: Bigc Studio / Shutterstock.com

Most major indices are in the red this April Fools’ day after closing at record highs last week. Why are stocks down today?

Well, stocks are showing a bit of hesitancy after enjoying strong growth in the first quarter of the year. Indeed, the S&P 500 closed up by 10% in Q1 — it’s strongest Q1 gains since 2019, per CNBC. This pushed the index to new highs at the end of March. As such, investors may be reflecting concerns of an imminent pullback further into the year.

At the time of this writing, the S&P is down 0.3% while the Nasdaq Composite is trending roughly even on the day.

Some investors believe stocks may be a bit overbought as it stands, with tech stocks largely carrying the wider market.

“The market is overbought by any measure,” LPL Financial Chief Global Strategist Quincy Krosby told CNBC. “At some point, we will see a pullback, and then at that point, you’ll start to hear the bears come out again suggesting that it’s deeper than just a healthy correction.”

Why Are Stocks Down Today?

Investors may also be responding to some hawkish commentary from Federal Reserve Chair Jerome Powell last Friday.

Perhaps surprisingly, the strength of the economy appears to be weighing down on stocks. According to Powell, because of the resilience of the economy by way of low unemployment and strong economic growth, the Fed isn’t being forced to cut rates in haste.

“That means we don’t need to be in a hurry to cut,” said Powell. “The economy is strong right now, and the labor market is strong right now. And inflation has been coming down. We can and we will be careful about this decision because we can be.”

While Powell maintains that the central bank will cut rates three times in 2024, it’s unclear when in the year these cuts will come.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

Source link

Share with your friends!

Products You May Like

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the latest stocks updates
straight to your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.

x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security