Stocks Suffer Worst Day Of The Year Following Best Day Since 2020

After seeing one of the best days since 2020, stocks tumbled on Thursday (May 5), erasing the gains from Wednesday. The Dow Jones Industrial Average finished the day down by 1,059, to close at 33,001. The Nasdaq and S&P 500 fell by 4.99% and 3.56%, respectively.

Investors were surprised by the quick turnaround from Wednesday when stocks jumped following comments by Federal Reserve Chairman Jerome Powell that the central bank was not considering a massive hike in interest rates to combat inflation.

“If you go up 3%, and then you give up half a percent the next day, that’s pretty normal stuff. ... But having the kind of day we had yesterday and then seeing it 100% reversed within half a day is just truly extraordinary,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, according to CNBC.

E-commerce and tech stocks were a significant drag on the markets following disappointing quarterly reports. Meta Platforms, Amazon, and Microsoft, were all in the red, as were eBay and Etsy, which both reported weaker-than-expected revenue guidance.