U.S. stocks fell as recession fears and disappointing earnings reports weighed on investors.
Major indexes fell, while bond yields rose.
Super Micro Computer and Airbnb suffered sharp declines after missing their earnings.
U.S. stocks fell on Wednesday as the stock market rally following the sell-off lost steam and investors were treated to a handful of disappointing earnings reports. All three benchmark indexes closed lower, while bond yields rose.
Stocks rose in early morning trading after the Bank of Japan said it would not raise rates when markets were unstable, fueling further confidence among investors worried about the dismantling of carry trade operations in global markets.
However, stocks ultimately fell as investors continued to worry about recession risks and were greeted by a series of weak corporate earnings reports.
Supermicrocomputer SCMI shares fell 20%, while Nvidia and Tesla fell 4%.
Airbnb recorded a record drop in its stock price during Wednesday’s session after the company said in its earnings report that it was seeing a slowdown in demand from its U.S. travelers. Share closed Wednesday’s trading session down 13% at $113.01 each.
The sharp sell-off in stocks has sent a signal that the market is “technically oversold,” strategists at financial firm iCapital said in a recent note.
“The economy is “The stock market is slowing and markets are clearly pricing in a recession, justifying defensive positioning for the core of the portfolio,” the firm said. “We have almost no room to buy back and the largest buyers could be in the market soon.”
However, other forecasters expect volatility to continue to spread across the market.
“It shouldn’t come as a huge surprise to the smart investor who understands the mechanics of the market and knows that the next correction is just around the corner,” Ken Mahoney, chief executive of Mahoney Asset Management, said in a statement.
Here’s where the U.S. indices stood at 4:00 p.m. close on Wednesday:
Here’s what else is happening today:
In commodities, bonds and cryptocurrencies:
West Texas Intermediate Crude oil rose 3.06% to $75.44 a barrel. Brent crude oilThe international benchmark crude oil rose 0.23% to $78.51 a barrel.
Gold was quoted relatively stable at $2,385.66 per ounce.
The yield on the 10-year Treasury note rose six basis points to 3.952%.
Bitcoin fell 3.4% to $54,740.
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