U.S. stocks fell, capping off a gloomy April for investors and ending the worst month of the year for the stock market.
The Dow Jones Industrial Average fell 570 points, and the S&P 500 index fell 1.6%, ending a five-month winning streak. The Nasdaq market also closed down 2%.
Two worrying economic reports sent the market into the red, with consumer confidence hitting its lowest level in nearly two years. Meanwhile, labor costs, or wages, for U.S. companies rose faster than economists expected. Higher wages are clearly good news for American workers, but they are also inflationary pressures that will influence the Federal Reserve’s rate cut schedule.
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Investors will get an update on how the Fed is responding to all the data pointing to stronger-than-expected inflation when the central bank concludes its two-day policy meeting on Wednesday. .
Among the notable earnings reports on Tuesday was McDonald’s, whose profit fell 0.2% after its latest quarter’s profit was slightly below analysts’ expectations. According to the Associated Press, sales at overseas franchised stores have been hurt by boycotts in Muslim-majority markets over perceived support for Israel.
Eli Lilly also reported another blockbuster quarter thanks to its weight-loss drug Zepbound, which competes with Novo Nordisk’s Ozempic. The drug giant raised its outlook for this year while reassuring investors that it has enough drugs to meet soaring demand. The stock ended the day up 6% and is up more than 90% over the past year.
Another big move is multinational auto conglomerate Stellantis, which owns Jeep, Chrysler, and Dodge. The company announced a 12% drop in first-quarter profit, but called it a “transition period” and said it would continue to invest in electric vehicles, including plans to launch about 18 EV models worldwide this year. I swore. The stock price fell more than 10% on that day as well.
Amazon, Starbucks and chipmaker AMD were scheduled to report quarterly results after the bell.
Meanwhile, cannabis stocks rose after the Associated Press reported that the Biden administration plans to reclassify marijuana as a less dangerous drug. The move will have far-reaching implications for the nascent cannabis industry. Tilray and Canopy Growth, two of the largest publicly traded cannabis stocks, rose 40% and 75%, respectively.
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Wall Street is hoping May will see a return to the bull market that lost momentum in recent weeks. In addition to cues from the Fed on Wednesday, new earnings releases and a monthly jobs report are expected to wrap up the week.
Financial highlights to watch this week
- Wednesday: Mastercard, Pfizer, CVS, Marriott, DoorDash, Kraft Heinz Company, Pizza Hut, KFC parent company Yum! Brands, eBay
- Thursday: Apple, pharmaceutical companies Novo Nordisk, Shell, Moderna
- Friday: Berkshire Hathaway, AMC
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Newsweek is committed to challenging conventional wisdom, finding common ground and finding connections.
