There are reports the Fed is considering a 75-basis point interest rate hike
Last week's selloff paled in comparison to the bloodbath on Wall Street today. All three major indexes logged their fourth-straight loss, with the Dow in particular shedding 876 points to close at its lowest level since February 2021. The S&P 500 closed in bear market territory and at its lowest level since March 2021, while the Nasdaq fell to levels not seen since November 2020. Session lows for stocks occurred in the wake of a Wall Street Journal report that said the Federal Reserve is "likely to consider" a 75-basis point interest rate hike later this week, much steeper than the initially expected 25-basis point hike.
A sharp rise in the 10-year Treasury yield -- the biggest jump since March 2020 -- demolished the tech sector as well. In addition, the 2-year Treasury yield briefly crossed the 10-year rate earlier, forming a yield curve inversion that may be indicative of a recession. Meanwhile, the Cboe Volatility Index (VIX) recorded its best single-day percentage gain since May.
Continue reading for more on today's market, including:
- One blue-chip stock to buy the dip on.
- Options traders blasted this FAANG name today.
- Plus, Tesla shrugs off upgrade; RedBox stock rises above; and two crypto stock swimming in red ink.
The Dow Jones Average (DJI - 30,516.74) dropped 876 points, or 2.8%, for the day. McDonald's (MCD) was the only gainer, adding 0.5%. Boeing (BA), meanwhile, paced the laggards with an 8.8% drop.
The S&P 500 Index (SPX - 3,749.63) shed 151.2 points, or 3.9% for the day. Meanwhile, the Nasdaq Composite (IXIC - 10,809.23) lost 530.8 points, or 4.7% for the session.
Lastly, the Cboe Market Volatility Index (VIX - 34.02) added 6.3 points, or 22.6% for the day.
5 Things to Know Today
- The Federal Aviation Administration (FAA) concluded SpaceX’s Starship rocket program will need to take over 75 actions to mitigate its environmental impacts. (CNBC)
- The Food and Drug Administration (FDA) said Pfizer’s (PFE) Covid-19 vaccine seems to be safe and effective for children under 5 years old ahead of a panel meeting. (MarketWatch)
- Tesla stock could not shake today's broader-market headwinds.
- A short squeeze candidate RedBox stock extended its recent rally.
- How a cryptocurrency landslide pushed these two stocks lower.
There were no earnings reports of note today.
Tightening Supply Boosts Oil Prices
Oil prices settled cautiously higher on Monday, reversing earlier losses to snap a two-day losing streak. Traders ultimately brushed off inflation and demand concerns amid another rise in Covid-19 cases in China. However, Libya's political protests have nearly led to a halt in production, tightening supplies by over one million barrels per day. July-dated crude added 26 cents, or 0.2%, to settle at $120.93 per barrel.
Meanwhile, gold prices fell to close at their lowest level in more than three weeks. The yellow metal suffered as U.S. Treasury yields continued to move higher, and the U.S. dollar gained strength. In turn, August-dated gold shed 2.3%, or $43.70, to close at $1,831.80 an ounce.