Stock market plunges over 600 points due to ongoing concerns about potential interest rate decrease.
Semiconductor company Nvidia rose more than 9% while the broader market declined, indicating a lack of market breadth.
The S&P 500 and Nasdaq Composite, which had started the day at new intraday highs, dropped 0.8% and 0.5% respectively.
Stocks dropped after the US Services Purchasing Managers Index for May, which was expected to decline slightly, came in 3.5 percentage points higher, marking the highest level since last June.
The Manufacturing PMI also came in higher than anticipated, leading to renewed concerns among investors about the Fed cutting rates.
"If you don't have NVIDIA in your portfolio, it's not a good day. Tech is the only sector that's not in the red," wrote Louis Navellier of Navellier Investing in a note to clients on Thursday.
The Federal Reserve unsettled markets on Wednesday afternoon with the release of their last policy meeting notes.
The minutes revealed that "some" officials were open to increasing interest rates if necessary and that there were doubts that financial conditions were restrictive enough to prevent inflation from rising.
Goldman Sachs CEO David Solomon also stated on Wednesday at a Boston College event that the Fed was unlikely to begin cutting rates this year.
"I'm still at zero cuts," he said. "I think we're set up for more persistent inflation."
Boeing weighed on the markets on Thursday, plummeting over 7% after the struggling airliner disclosed that its cash-flows were worse than anticipated this year. This caused investors to worry that its debt ratings would be downgraded to junk-bonds.
This story is still developing and will be updated.
Read also:
- Lack of snow also opens up new opportunities for winter tourism
- Abrupt end to e-car subsidies
- The chemical industry has little confidence
- Intersport boss hopes for sales boom through sporting events
In light of the potential interest rate decrease concerns, some businesses might consider holding off on major investing decisions. Despite the market decline, tech-focused investors see opportunities in companies like Nvidia for business expansion.
Source: edition.cnn.com
