Yikes. What an all-around unpleasant day in the stock market. Talk of a bloodbath is ringing on Wall Street, and the major indices are deep in the red. So what did the stock market do today? And why? Follow along with InvestorPlace for everything you need to know.
It was not a pretty day. The S&P 500 closed down 1.34%, with the Dow Jones Industrial Average dropping nearly 400 points to close down 1.11%. The tech-heavy Nasdaq Composite once again was a victim, down 2.11%.
You can see the ugliness in top movers, too. Tesla (NASDAQ:TSLA), Apple (NASDAQ:AAPL) and Vroom (NASDAQ:VRM) were all in the red. Reddit-favorite GameStop (NYSE:GME) saw a bit of a silver lining, but ultimately only closed higher by 6.6%. Tanger Factory Outlet (NYSE:SKT), an outlet mall specialist, initially gained on r/WallStreetBets hype. SKT stock, however, also ended Thursday in the red.
So what did the stock market do today? Take a look at these three top stories.
What Did the Stock Market Do Today? Sell Off.
Yes, markets sold off on Thursday, and it was not particularly pretty.
At the heart of the panic were comments from Federal Reserve Chair Jerome Powell. Speaking at an event with The Wall Street Journal, investors were waiting for his insights on investor concerns and rising yields on the 10-year U.S. Treasury note.
Powell did not exactly ease those concerns today. He did share some positives. The Fed leader said he sees economic growth ahead, citing the ongoing vaccine rollout as a source of an improving job outlook. He also shared that he is targeting an improvement in the unemployment rate, and reaffirmed the need for further Congressional stimulus.
But when it came to inflation and Treasury yields, Powell was a bit vague. As InvestorPlace contributor Chris MacDonald reported, Powell acknowledged the movement in the bond market. But he said the Fed is more concerned about signs of a tightening financial system or other disorderly conditions appear. That seems to translate to a catalyst for rising bond yields and worsening inflation… whether or not that is actually the case.
Today is a good demonstration of how much markets rely on policymakers' decisions above any fundamental economic data. Fed Chair Powell surprised bond & stock markets with his unwillingness to talk down recent yield moves. OPEC+ nations seem committed to higher oil prices. (1/2)
— Lisa Abramowicz (@lisaabramowicz1) March 4, 2021
Many experts believe that this is just a short-term hiccup. Take it from InvestorPlace analyst Luke Lango. Instead of panicking about tech stocks, he thinks several growth names are still undervalued. The selloff may be ugly, but bright things are ahead.
Senate Moves Forward With $1.9 Trillion Stimulus
Another part of the selloff puzzle is the $1.9 trillion stimulus plan, a Covid-19 relief proposal that started with President Joe Biden. After passing in the House last week, the Senate voted to move forward with the legislation today. This means that despite drawn-out discussions, Senate Majority Leader Chuck Schumer is committed to finishing debate before the end of the week. Vice President Kamala Harris will serve as a tie-breaker in the voting process.
On one hand, this stimulus is a source of inflationary fears. Some experts think that $1.9 trillion is simply too much — that the economy does not actually need that much money right now. However, Biden, Powell, Treasury Secretary Janet Yellen and other key lawmakers have voiced their support for the total dollar amount.
On the other hand, this stimulus package could be a boon for certain equities. That comes down to a few things in the bill, including $1,400 direct payments to the majority of taxpayers. As we saw with the first round of $1,200, cash from the government helped buoy consumer spending. And for some consumers, that money was a means to get on Robinhood and start investing.
We could see that again. As Alex Sirois wrote at the end of February, there are certain stocks to buy for a second stimulus check. These include Taiwan Semiconductor (NYSE:TSM), Home Depot (NYSE:HD) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). You can read the full list here.
Elon Musk Didn’t Exactly Make It to the Moon
What about a lighter topic… space!
Elon Musk made headlines again today with his SpaceX. Last night, the company successfully landed its Starship rocket after launch. The rocket flew to an altitude of approximately six miles, and then stuck the landing. This is the first time the Starship prototype has landed successfully, and marks a milestone as SpaceX hopes to take the spacecraft to the moon or Mars.
However, the SN10 spacecraft exploded a few minutes after landing, prompting criticism of Musk and SpaceX. To Lango though, that criticism misses a real opportunity in space stocks.
Instead of fretting the explosion, appreciate the new record for SpaceX. He identifies opportunities in names like Virgin Galactic (NYSE:SPCE), Holicity (NASDAQ:HOL) and Maxar Technologies (NYSE:MAXR).
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
