Wall St: Nasdaq slides 3% as tech stocks weigh; Dow plunges 600 pts

The Nasdaq plunged 4.6% and the other major indexes tumbled on Thursday, as Federal Reserve Chair Jerome Powell’s less hawkish tone failed to ease investor expectations of bigger interest rate hikes this year.

The tech-heavy Nasdaq looked set to erase all of its gains in the previous session, with Google-parent Alphabet Inc, Apple Inc, Microsoft Corp, Meta Platforms, Tesla Inc, and Amazon.com, falling between 4.5% and 6.5%.

All of the 11 major S&P sectors traded lower, with consumer discretionary sector .SPLRCD falling close to 5%.

The benchmark S&P 500 index .SPX recorded its biggest one-day percentage gain in nearly two years on Wednesday after the Fed raised interest rate by half a percentage point as expected and said it would begin shrinking its $9 trillion asset portfolio next month in an effort to further lower inflation. Read full story

Fed Chair Jerome Powell explicitly ruled out raising rates by 75 basis points in a coming meeting, calming nerves over fears of aggressive policy tightening.

However, on Thursday, traders saw a 75% chance of a 75 basis point hike by the Fed at its June 15 meeting. IRPR

“I will say the markets are not buying the dovish Fed,” said Callie Cox, U.S. investment analyst at eToro

“We’ve had a lot of Fed speakers come out and basically throw the spaghetti at the wall and say that rate hikes need to happen faster and happen now. So, it makes sense that investors are kind of reverting back to this place of fear that the Fed could do way more than they imagined to get policy to fight inflation.”

The focus now shifts to the U.S. Labor Department’s closely watched monthly employment report on Friday for clues on labor market strength and its impact on monetary policy.

Worries about Fed policy moves, mixed earnings from some big growth companies, the conflict in Ukraine and pandemic-related lockdowns in China have hammered Wall Street recently, overshadowing a better-than-expected quarterly reporting season.

The CBOE Volatility index .VIX, also known as Wall Street’s fear gauge, touched close to 30 points.

At 11:03 a.m. ET, the Dow Jones Industrial Average .DJI was down 878.73 points, or 2.58%, at 33,182.33, the S&P 500 .SPX was down 130.19 points, or 3.03%, at 4,169.98, and the Nasdaq Composite .IXIC was down 546.15 points, or 4.21%, at 12,418.70.

Twitter Inc TWTR.N rose 3.7% as Elon Musk secured $7.14 billion in funding from a group of investors that includes Oracle Corp ORCL.N co-founder Larry Ellison to fund his $44 billion takeover of the social-media company. Read full story

EBay Inc EBAY.O and Etsy Inc ETSY.O slid 7.5% and 15.5%, respectively, after the online retailers projected downbeat second-quarter revenue. Read full storyRead full story

Of the 368 S&P 500 companies that have reported earnings as of Wednesday, 79.9% have topped analyst expectations, according to Refinitiv data.

Declining issues outnumbered advancers for a 7.72-to-1 ratio on the NYSE and a 5.18-to-1 ratio on the Nasdaq.

The S&P index recorded 2 new 52-week highs and 37 new lows, while the Nasdaq recorded 21 new highs and 169 new lows.