Nasdaq Loses Nearly 4%, Techs Reel As Global, Fed, And Earnings Fears Mount

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(Tuesday Market Close) Stocks turned in another day of deep losses against a head-spinning mix of investor concerns from tech earnings and fresh global supply chain fears to escalating Russia-Ukraine tensions and exactly how far the Fed can move next week.

Closing at its lowest level since 2020, the tech-heavy Nasdaq Composite ($COMP) lost 3.95% by the close of trading ahead of earnings results from Alphabet GOOGL and Microsoft MSFT. Shares of Microsoft (MSFT) fell in after-hours trading after beating earnings and raising guidance. Alphabet (GOOGL) fell under selling pressure after showing slowing sales growth. Apple AAPL and Amazon.com AMZN report on Wednesday.

The Dow Jones Industrial Average ($DJI) accelerated losses by the close, finishing down 809.28 points, off another 2.38%.

The yield on 10-year U.S. Treasuries closed at 2.773%, down from Monday’s 2.825%, but still near its 2018 high as investors sold bonds ahead of next week’s FOMC meeting.

The Dow Jones Industrial Average ($DJI) accelerated losses by the close, finishing down 809.28 points, off another 2.38%. 

CHART OF THE DAY: SUPPORT, ANYONE? As tech results—even those beating analysts’ estimates—failed to impress investors on Tuesday as Nasdaq-100 futures (/NQ) broke through previous support levels during the session. Data Sources: ICE, S&P Dow Jones Indices. Chart source: The thinkorswim® platformFor illustrative purposes only. Past performance does not guarantee future results.

Variables Everywhere

Volatile trading in markets continued throughout Tuesday’s session as renewed fears over global supply chain disruptions, ongoing inflation concerns, and rising Russia-Ukraine tensions competed against the backdrop of the Federal Reserve’s commitment to tightening monetary policy aggressively over the near term.

As selling pressure continued throughout the day, many traders were monitoring key support levels for the S&P 500 (~4,200) and the Nasdaq 100 (~13,000).  Pulling back to these levels put significant pressure on the major tech companies reporting after today’s close.

With so many variables up in the air on the economic and earnings front, the price discovery process may be more volatile than what many investors may be used to. 

Some market participants are also beginning to question if the Fed can be as aggressive as it had initially planned given the concerns the economic fallout may be more severe than a slight moderation of global growth. 

Meanwhile, General Electric GE fell more than 10%, or $9.29, to $80.59 after issuing a warning that supply chain disruptions would affect business this year3M MMM, which reported better-than-expected first-quarter sales, lost 3% to $144.22.

Notable Calendar Items

April 28: Gross domestic product (GDP) and earnings from Apple (AAPL), Amazon.com (AMZN), Merck MRK, Intel INTC, and McDonald’s MCD

April 29: Earnings from Exxon XOM, Chevron CVX, and AbbVie ABBV

May 2: ISM Manufacturing PMI and earnings from Berkshire Hathaway (NYSE: BRK-A), Devon Energy DVN, and Expedia EXPE

May 3: JOLTs Job Openings and earnings from Pfizer PFE, Advanced Micro Devices AMD, and Airbnb ABNB

May 4: FOMC Interest Rate Decision (2 p.m. ET) and earnings from Novo Nordisk NVO, Moderna MRNA, Volkswagen VWAGY, MetLife MET, and Marriott MAR

TD Ameritrade® commentary for educational purposes only. Member SIPC.

Image sourced from Unsplash

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