The Dow dropped more than 165 points Thursday and tech stocks were led the way down. The Nasdaq tumbled nearly 1.5%, with tech leaders Apple (AAPL, Tech30), Amazon (AMZN, Tech30), Google owner Alphabet (GOOGL, Tech30), Facebook (FB, Tech30) and Microsoft (MSFT, Tech30) all lower.
Traders are letting their emotions get the best of them. According to CNN moneys fear and greed index, the market hit “fear” territory on Thursday. It later completed on “greed” on Wednesday.
This system is defined as a measurement of why large amounts of stock moves based off human emotion, such as fear and greed.
What is really occurring here?
Not much, according to sources, only a select amount of companies actually reported earnings Thursday morning. There were no major economics reports to speak of also.
Many investors still seem to believe that the Federal Reserve will keep rates in a relatively low margin. This is in the hopes that they will keep the economy stable by using this methodology.
Wall Street is still keeping faith that promises made by President Trump made about tax reforms and modifying the regulations on banks will see their way through. There is also hope for the health care and potential stimulus program on infrastructure spending will occur, even if it takes until the year 2018 to break ground.
Investors are starting to cash on their successful stock return in order to make their second quarter returns look great.
Despite the recent events the NASDAQ still comes out on top, being up 14%.
The fate of the market is uncertain, many traders are looking for a more profitable leader for the market as American banks and oil trades become more expensive and begin to plummet. Stock depends on whether companies are willing to report proper results to maintain consumer faith.
There will be larger reports when the Corporations start posting their second quarter earnings later in July.