Banking

Dow Jones Sinks 545 Points, Stoked By Inflation Fears

The Dow Jones Industrial Average fell sharply in today’s market, while the Nasdaq led the downside. The tech-heavy index continued deeper below its key 50-day moving average. The Dow continued selling off, after hitting a record high earlier this week, with a decline of over 500 points.




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Stock Market Today

At 3:15 p.m. ET, the major indexes traded near their lows of the day. The Nasdaq composite fell 2.4%, while the S&P 500 traded around 1.8% lower. The Dow Jones industrials posted a loss of 1.6%. The small-cap Russell 2000 index declined 6%. Volume was running lower on the NYSE and the Nasdaq vs. the same time on Tuesday.

U.S. Stock Market Today Overview

Index Symbol Price Gain/Loss % Change
Dow Jones (0DJIA) 33731.16 -538.00 -1.57
S&P 500 (0S&P5) 4077.30 -74.80 -1.80
Nasdaq (0NDQC ) 13062.27 -327.16 -2.44
Russell 2000 (IWM) 213.36 -5.60 -2.56
IBD 50 (FFTY) 42.61 -1.86 -4.18
Last Update: 3:14 PM ET 5/12/2021

Fears of increasing inflation caused investors to sell on Wednesday as the Labor Department reported that headline consumer prices surged by a faster than expected 4.2% in April. This was also the highest inflation rate since September 2008. Economists forecast an increase of 3.6%. Core CPI, which excludes food and energy, rose 3% year over year.

The 10-year Treasury yield was up sharply, sitting at 1.69%. The 10-year Treasury yield late Tuesday was at 1.62%.

A broad market sector rotation continues as large-cap tech stocks and growth stocks continued to fall under pressure. As for growth stocks, the Innovator IBD 50 ETF (FFTY) fell over 3%. The ETF is below the 50-day line as shares have sold off nearly 7% this week. PLBY (PLBY), MarineMax (HZO) and Green Brick Partners (GBRK) hindered the ETF with losses of more than 6% each.

The Nasdaq and the S&P 500 added another distribution day Tuesday. While the market remains in a confirmed uptrend, an elevated distribution count suggests investors should lower their exposure.

Dow Jones Today

In the Dow Jones industrials, several blue chips held losses of more than 2%. Home Depot (HD) and Honeywell (HON) led the downside with losses of over 3% each. Chevron (CVX) and Merck (MRK) were among the few gainers in the Dow and led the upside with gains of roughly 1% apiece.

Elsewhere, Nike (NKE) traded down more than 2% as shares are testing the 50-day line. The athletic shoe and apparel giant received an upgrade from Jefferies on Tuesday. The chart continues a four-month consolidation with a 148.05 buy point. Shares remain 9% away from the buy zone.

Home Depot continued below the 328.77 entry of a three-weeks-tight pattern. The home improvement giant is set to report Q1 results May 18. Analysts expect earnings to rise 44% to $2.99 a share on a 21% revenue increase to $34.2 billion.

Goldman Sachs (GS) posted a modest 0.4% decline but shares remain inside the buy zone from a cup base with a 356.95 buy point, according to IBD MarketSmith chart analysis. Shares broke out past the buy point last Wednesday. The stock maintains a strong 86 RS Rating and a perfect 99 Composite Rating.

Follow Fox on Twitter at @foxonstocks for more Dow Jones and market commentary.

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