Market Crash in 2023: Stocks Plunge Amid Inflation and Interest Rate Concerns
Explore the sharp decline in U.S. stock markets on February 21, 2023, driven by inflation fears, aggressive Federal Reserve policies, and disappointing retail earnings.
Bill McColl brings over 25 years of expertise as a senior producer and writer across TV, radio, and digital platforms, leading teams in delivering impactful news coverage on major global events.
Essential Insights
- On February 21, 2023, leading U.S. stock indices recorded significant losses, marking a challenging start to the shortened trading week.
- The Nasdaq dropped sharply by 2.5%, while the S&P 500 and Dow Jones Industrial Average each declined around 2%.
- Investor concerns about persistent Federal Reserve interest rate hikes and cautious forecasts from top retailers fueled the market downturn.
The U.S. stock market experienced a steep decline as inflation worries intensified, prompting fears that the Federal Reserve will continue to raise interest rates aggressively. Retail giants reported that rising prices are dampening consumer spending, further unsettling investors. The Dow and S&P 500 each fell by 2%, with the Nasdaq experiencing a 2.5% drop.
Within the Dow, only Walmart (WMT) avoided losses. Home Depot (HD) shares plunged 7% after disappointing sales and outlook reports, dragging the index down. Other major retailers, including Lowe's (LOW), Nike (NKE), Target (TGT), and Macy's (M), also saw their shares decline. Despite Walmart’s stock rising on its earnings report, its cautious guidance added to the overall negative market sentiment.
Bond yields surged, with the 10-year Treasury note reaching its highest level since November, causing stocks sensitive to borrowing costs to fall sharply. Technology giants such as Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Microsoft (MSFT), and Salesforce (CRM) each dropped about 2%, while Intel (INTC) and Tesla (TSLA) shares fell by 5%. Shares of homebuilders, banks, and credit card companies also declined.
Nordson (NDSN) shares tumbled 14% after reporting earnings and sales below expectations and lowering its outlook. Similarly, Expeditors International of Washington (EXPD) posted weaker-than-expected earnings and revenue, leading to a drop in its share price.
General Mills Revises Earnings Upward
General Mills (GIS) saw its shares rise after raising its full-year earnings and revenue forecasts. Kellogg (K) shares also gained. Molson Coors (TAP) exceeded profit expectations, boosting its stock. Copper futures surged, benefiting Freeport-McMoran (FCX) shares.
Meanwhile, oil and gold prices declined. The U.S. dollar strengthened against the euro and yen but weakened versus the pound. Major cryptocurrencies traded lower amid the market turbulence.
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