Today, many investors are asking a very simple question — why are stocks down today? If only the answer was simple…
There’s a lot going on in the stock market. More specifically, macro catalysts are not favorable for investors in most sectors. While commodities, financials and other stocks that may benefit from rising inflation and higher interest rates continue to perform decently, the majority of growth sectors such as technology are hurting badly right now. For investors in companies like Asana (NYSE:ASAN), Tesla (NASDAQ:TSLA), ServiceNow (NYSE:NOW) and Apple (NASDAQ:AAPL), it’s been a rough day.
Interestingly, each of these companies is in a very different sector. In many regards, there’s a lot to like about each of these stocks. For investors thinking long term, these four companies have been winners for most of the past decade. However, the tides appear to be shifting in financial markets.
Let’s dive into what’s driving these stocks lower right now.
Why Are Stocks Down Today?
As most investors are aware, the stock market is attempting to price in some difficult-to-assess catalysts right now. Top of mind for most investors right now is the ongoing Russia-Ukraine conflict. While we appear to still be a ways away from all-out war, this is the closest an entire generation of investors has been to feeling the impact of what could be a massive international conflict. This macro headwind compounds other key issues such as surging inflation and the threat of rising interest rates. Overall, the broad outlook for equities is not looking positive today.
Additionally, a range of disappointing earnings that have come out over the past week suggest growth could broadly be slowing for many large growth stocks. These four companies are each closely watched barometers of economic performance domestically and abroad. A further disruption of global trade, or inflation that gets really out of hand, could result in slower growth in the near term. These are all headwinds investors are trying to wrap their heads around right now.
Ultimately, investors appear to be focusing on managing risk over maximizing return right now. Accordingly, this risk-off view is one that may not bode well for these major stocks, at least in the near term.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.