Sharp fall in shares on Wall Street: these are the reasons

Wall Street started the week in the red. Stocks fell sharply in these first days of May, mainly pushed by the S&P500, considered one of the most representative of the situation of the stock market in the United States.

The reduction of the S&P500 on this Monday, of 2.5%, has been located by analysts as a new low for 52 weeks.

Meanwhile, the Dow Jones Industrial Average also started in a tailspin, losing 560 points, or the equivalent of 1.7%.

For its part, the Nasdaq Composite, of which more than 5,000 companies are part, lost 3.7% on this day.

According to sources consulted by CNBC, it would be a situation that is being driven by the policy deployed by the Federal Reserve, with the purpose of trying to control the escalation of inflation from the increase in interest rates, something that is particularly significant for consumption in the United States, which, in general, is made from credit.

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Meta, led by Mark Zuckerberg. – Photo: Getty Images

Blow to technology companies

The fall on Wall Street indicates an aversion to risk on the part of investors. The blow is felt by technology companies such as Meta Platforms, the American technology and social media conglomerate led by Mark Zuckerberg, which fell more than 4.3%. Alphabet has been in the same situation, the main subsidiary is Google Chrome and Android, which registers a decline of 1.6%, according to the publication of CNBC.

Meanwhile, companies like Amazon, Apple and Netflix had a decrease of almost 3%.

Strong fall of the company of Elon Musk

In Tesla’s case, billionaire Elon Musk’s company has seen a drop of around 7% and the light at the end of the tunnel in the Wall Street situation does not seem to be near.

Although the stock market of each country is susceptible to movements due to global or local circumstances, in this case, The risk of a recession is becoming more frequent as inflation increases and the path of raising rates to control it is taken.

Precisely, for this week it is expected that the inflation data in the United States will be released, in April, and the concern is round, because in March, the indicator was at the highest levels of the last 4 decades (8.5 %).

The expectation is if with the application of monetary measures, such as the Federal Reserve raising interest rates, price stability will be achieved without causing an economic recession.

Almost all stocks fall

For all this, on the first day of this week on Wall Street, no one seems to escape. According to the publication of CNBC, Nike shares also fell, as did others that have more to do with industrial sectors, such as Caterpillar and Deere.

Nor did bank stocks escape the tail end of this Monday. Bank of America fell more than 1%; while companies like Boeing were among the biggest losers in Dow Jones, down more than 4%.

Not to mention Chevron, a company in the energy sector, which registered a drop of 3.7% on Monday.

Exceptional cases are those of Home Depot and Walmart, which continued to post profits amid a massive sale of the products they distribute.

The expectation of analysts is that the markets continue to submerge in volatilityin the midst of a risk of stagflation (the economy stagnates and the prices of goods and services remain high) which is neither ruled out nor confirmed, since it depends on the market’s reaction to the application of monetary policy measures.

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