Dow Jones Recovers Previous Day Losses Jumping 400 Points on Thursday

Updated on May 15, 2021 at 8:02 am UTC by · 3 mins read

Investors and the market are looking closely at the inflation data as Wall Street looks to navigate through these muddy waters. Fears of inflation have also triggered a sell-off in growth stocks recently.

On Thursday, May 13, Dow Jones Industrial Average (INDEXDJX: .DJI) jumped over 400 points recovering its previous day losses. The Dow Jones jumped 1.3% or 433 points closing above 34,000 points. This is a sharp renounce from the previous day’s volatility in the US stock market.

Dow Jones Gaining Points

The Nasdaq Composite (INDEXNASDAQ: .IXIC) also jumped 0.7% closing at 13,124.99. Investors were eager to pick some beat-down tech stocks from the previous day’s volatility. Giants like Microsoft Corp (NASDAQ: MSFT) and Apple Inc (NASDAQ: AAPL) surged 1.5% each.

Elon Musk‘s Tesla Inc (NASDAQ: TSLA) dropped another 3% as investors remained disappointed with the company’s decision to drop Bitcoin payments. However, the overall market sentiment remains optimistic as of now. Keith Lerner, chief market strategist at Truist told CNBC:

“This bull market ultimately has further to run. Investors who are underweight equities should look to average into the market weakness and become more aggressive.”

Earlier on Wednesday, the fears of inflation drove the market south. The inflation data showed higher-than-expected price pressures causing concern among Wall Street players. But the announcement coming from Centers for Disease Control and Prevention drove optimism in the market on Thursday.

The CDC noted that fully vaccinated people no longer need to wear a mask. Besides, they can stay six feet away from others in normal settings. This helped several airline stocks to surge over the optimism that travel will take a boost. United Airlines Holdings Inc (NASDAQ: UAL), American Airlines Group Inc (NASDAQ: AAL), and Delta Air Lines Inc (NYSE: DAL) each surged 2%.

Inflation Concerns and Interest Rates

The higher-than-expected inflation report has caused concern among traders who are expecting a surge in interest rates. As per the Labor Department, the cost of goods and services in April last month accelerated at the fastest pace since 2008. Also, the Consumer Price Index was up 4.2% from a year ago. In a note, AB Bernstein strategist Inigo Fraser-Jenkins said:

“We do not think that yesterday’s inflation print changes the longer-term case for inflation after the reopening trade, and that is what ultimately matters for markets”.

On Thursday, another inflation report showed that the producer prices surged 6% from a year ago. This has led to strong liquidations in growth stocks. This is because rising price squeeze prices while eroding profits. If the inflation heat continues for a longer period, the Federal Reserve will have to taper accommodative monetary policy.

Share:

Related Articles

Will XRP Price Price Recover Past $3 Soon as Elon Musk’s DOGE Targets SEC

By February 18th, 2025

The XRP community is optimistic as Elon Musk’s DOGE reviews the SEC, fueling hope for regulatory reform and a potential XRP price rally.

Elon Musk’s X Money Gears Up for Crypto Adoption by Late 2025: Fireblocks Exec

By February 13th, 2025

Payment giants are rushing to adopt crypto strategies, with X likely offering crypto payouts by year’s end, says Fireblocks’ Ran Goldi.

Elon Musk’s DOGE Panel Launches Website: Details

By February 13th, 2025

Elon Musk’s DOGE has launched a website to provide updates on federal spending cuts, potentially contributing to a drop in US inflation.

Exit mobile version