US stocks tumbled on Tuesday, accelerating this month’s sell-off on Wall Street, as investors weighed a series of corporate reports against a backdrop of inflationary pressures and worries about an economic slowdown.
The S&P 500 fell 2.8% to close the session, while the Dow Jones Industrial Average fell 800 points, paring losses after the index briefly rallied on Monday. The tech-heavy Nasdaq Composite fell nearly 4%, posting its third-biggest decline of the year and marking its lowest close since December 2020. Meanwhile, U.S. Treasury yields retreated, with the 10-year reference falling to 2.7%.
“I think this will continue to be a market where we could take one step forward, two steps back in terms of absorbing some of the headlines that we’re seeing,” JP Morgan Asset Management global market strategist Meera Pandit told Yahoo . Finance live.
April has historically been a strong month for stocks, producing a positive return for the S&P 500 in 15 of the past 16 years, LPL Financial’s Ryan Detrick noted in a note earlier this month. This month, however, markets have been buffeted by the Russia-Ukraine war, continued concerns over the Federal Reserve’s rate-hike cycle, inflationary and supply chain pressures, and fears that the culmination of these headwinds could cause an economic slowdown.
“We’re seeing signs that growth is slowing and there’s talk of a recession in the next year or two,” Brad McMillan, chief investment officer at Commonwealth Financial Network, said in an emailed note. adding that what we’ve seen is a “typical, albeit sharper than usual, market cycle.”
“In the short term, it’s painful, but in the long term? It doesn’t really mean much,” McMillan said. “As long as the economy is fundamentally sound (which it is) and as long as policymakers are on top of things (which they are), businesses will continue to grow and make money.”
The story continues
Investors are in the heart of earnings season, with the most heavily weighted components of the S&P 500 scheduled to report results this week.
Google parent Alphabet ( GOOG , GOOGL ) kicked off reports for mega-cap tech names, revealing first-quarter sales that were roughly in line with estimates. The tech giant showed resilience in its key YouTube search and advertising businesses. Shares fell about 4% in extended trading.
Facebook parent company Meta ( FB ), Apple ( AAPL ) and Amazon ( AMZN ) are due to report quarterly results on Wednesday and Thursday.
On Friday, a fifth of companies in the index have reported first-quarter results so far, with 79% reflecting a rise in profits for the period, above the five-year average of 77%, according to the latest data available from FactSet. The magnitude of the gains, however, is below the five-year average: 8.1%, compared to 8.9%.
“The lower rate of earnings growth in the first quarter of 2022 relative to recent quarters can be attributed to both a difficult comparison with unusually high earnings growth in the first quarter of 2021 and the ongoing macroeconomic situation,” said John Butters, senior earnings analyst at FactSet, in a note.
US stocks paralleled moves in global stock markets to start the week, with major stock indexes in Europe and Asia falling largely on renewed concerns that a COVID outbreak in China could trigger another wave of blockades and further disrupt global supply chains.
“I think the most interesting thing that’s happening in China right now is not that the yuan is moving and not that the economy is slowing down, it’s that everything that’s happening right now, we knew about it weeks ago,” he said China Beige Book CEO Leland Miller on Yahoo Finance Live. “We knew the economy was slowing down, we knew they weren’t going to stimulate much, we knew lockdowns were spreading from Shanghai to other big cities, we knew the Fed was walking, we knew there was a crackdown politics, so it’s interesting that people see today as a watershed moment.”
Elsewhere in the markets, Twitter shares fell 4%, a day after the social media giant he officially announced on Monday that he accepted will be acquired by Tesla CEO Elon Musk for $54.20 per share, or $44 billion. Twitter shareholders will receive $54.20 in cash for each share they own, representing a 38% premium over Twitter’s April 1 closing level.
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4:00 PM ET: Stocks fall, worsening April’s sell-off
Here were the main market moves at the close on Tuesday:
S&P 500 (^GSPC): -120.92 (-2.81%) to 4,175.20
Dow (^DJI): -810.01 (-2.38%) to 33,239.45
Nasdaq (^IXIC): -514.11 (-3.95%) up to 12,490.74
Crude (CL=F): +$3.57 (+3.62%) to $102.11 a barrel
Gold (GC=F): +$5.60 (+0.30%) to $1,901.60 per ounce
10-year treasury (^TNX): -5.4 bp for a return of 2.7720%
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12:04 pm ET: S&P 500 falls 2%, Dow sheds 580 points, Nasdaq falls 3%
Here were the top market moves as of 12:04pm ET:
S&P 500 (^GSPC): -86.24 (-2.01%) to 4,209.88
Dow (^DJI): -572.31 (-1.68%) to 33,477.15
Nasdaq (^IXIC): -408.91 (-3.14%) up to 12,595.94
Crude (CL=F): +$3.05 (+3.10%) to $101.59 a barrel
Gold (GC=F): +$8.00 (+0.42%) to $1,904.00 per ounce
10-year treasury (^TNX): -8.3 bp for a return of 2.7430%
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9:30 am ET: Stocks retake losses to extend April selloff
Here’s where the major indexes were at the start of trading on Tuesday:
S&P 500 (^GSPC): -22.31 (-0.52%) to 4,273.81
Dow (^DJI): -224.66 (-0.66%) up to 33,824.80
Nasdaq (^IXIC): +165.56 (+1.29%) to 13,004.85
Crude (CL=F): +$1.65 (+1.67%) to $100.19 a barrel
Gold (GC=F): +$10.90 (+0.57%) to $1,906.90 per ounce
10-year treasury (^TNX): -7.7 bp to get 2.7490%
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9:23 am ET: Home prices are up nearly 20% in February
US housing price growth accelerated during the month of February, but there may be a slowdown.
Standard & Poor’s reported Tuesday that its S&P CoreLogic Case-Shiller national home price index rose 19.8 percent in the second month of the year, up from 19.1 percent in January. The figure marks the third highest reading since the index was developed in the 1980s.
The 20-City results beat analysts’ expectations of a 19.2% annual gain, according to Bloomberg consensus estimates.
The 10-city compound annual increase was 18.6%, up from 17.3% the previous month. The 20-City Composite posted a 20.2% year-over-year gain, up from 18.9% the previous month.
“The macroeconomic environment is rapidly evolving and may not support extraordinary home price growth for much longer,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI , in a statement. “The post-COVID pick-up in general economic activity has fueled inflation, and the Federal Reserve has begun raising interest rates in response.”
“We may soon start to see the impact of rising mortgage rates on house prices,” he added.
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9:09 am ET: PepsiCo raises full-year revenue forecast on higher prices and soda demand
PepsiCo ( PEP ) reported better-than-expected quarterly earnings of $1.29 per share, beating analysts’ expectations of $1.23 per share, according to Bloomberg consensus data.
The beverage and snack maker also raised its full-line revenue forecast, boosted by higher prices and a pick-up in demand for its soft drinks at theaters and restaurants. Pepsi now expects fiscal 2022 organic revenue to rise 8%, compared to its forecast of a 6% increase.
During the quarter, the company also reported taking a $241 million charge related to the Russia-Ukraine crisis.
“Going forward, we will focus on controlling what we can, such as improving our focus on productivity and sharpening our revenue management capabilities, while continuing to make the necessary long-term investments to strengthen our businesses and win in the market,” PepsiCo said. CEO Ramon Laguarta told the release of earnings.
Pepsi shares were little changed in premarket trading.
Pepsi cans are seen at the store in this illustration photo taken in Krakow, Poland, on March 18, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)
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7:10 a.m. ET: Futures fall after stocks recover from the previous session’s losses
Here were the top moves in futures trading ahead of Tuesday’s open:
S&P 500 futures (IS=F): -16.50 (-0.40%) to 4,276.25
Dow futures (YM=F): -130.00 (-0.38%) to 33,835.00
Nasdaq Futures (NQ=F): -62.50 (-0.46%) to 13,473.25
Crude (CL=F): -$0.35 (-0.36%) to $98.89
Gold (GC=F): +$12.70 (+0.67%) to $1,908.70 per ounce
10-year treasury (^TNX): 0.00 bps to get 2.8260%
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Monday at 6:15 PM ET: Stock futures are muted ahead of earnings reports on mega-cap earnings
Here are the stock futures that traded after the market on Monday evening:
S&P 500 futures (IS=F): -1.75 (-0.04%) to 4,291.00
Dow futures (YM=F): -10.00 (-0.03%) to 33,955.00
Nasdaq Futures (NQ=F): -19.50 (-0.14%) to 13,516.25
Crude (CL=F): -$0.10 (-0.00%) to $98.66
Gold (GC=F): +$3.20 (+0.17%) to $1,899.20 per ounce
10-year treasury (^TNX): -8 bp to get 2.8260%
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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