Amid Fed Rate Concerns and Boeing Struggles,the industrial averages dropped heavily
On Thursday, the Dow Jones Industrial Average dropped by more than 600 points, marking its worst day in 2024. Despite Nvidia’s impressive earnings and a 10-for-1 stock split announcement, which saw its shares rise by over 9%, the broader market fell, revealing a lack of market breadth. Boeing’s stock plummeted over 7.5% due to poor cash flow forecasts, raising concerns about its debt rating.
The S&P 500 and Nasdaq Composite also fell by 0.7% and 0.4%, respectively. This market decline was triggered by stronger-than-expected economic data, including a high Purchasing Managers Index for May and lower-than-expected initial jobless claims, suggesting the economy is resilient against inflation pressures.
Federal Reserve concerns further fueled the selloff. The release of the Fed’s policy meeting minutes indicated a willingness to raise interest rates if necessary, countering market hopes for rate cuts. Goldman Sachs CEO David Solomon also dampened expectations for rate cuts this year. Consequently, Treasury yields rose, reflecting a shift in investor sentiment towards fewer anticipated rate cuts, now expected only in December.
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