New York
CNN
–
US markets have had a rough week. The Dow has fallen more than 1,000 points over the past three days alone and showed no sign of the negative momentum abating on Thursday.
The Dow was down 386 points, or 0.9%, in mid-morning trading. The S&P 500 fell 0.5% and the Nasdaq Composite fell 0.7% as lackluster earnings results from Salesforce ( CRM ) worried investors.
Shares of the customer relationship management company fell 20% after it reported a revenue shortfall and lowered expectations for next year.
This follows a bad Wednesday where all 11 sectors of the S&P 500 closed lower. The Dow fell more than 300 points, driven largely by a drop in chipmaker giant Nvidia ( NVDA ) , dragging big tech stocks down with it.
This week’s decline was driven by a number of factors, including stronger-than-expected earnings and economic data. Bonds have taken a particular hit as inflation concerns mount and after a weak Treasury auction on Wednesday. The 10-year Treasury yield climbed to its highest level since late April.
The strong economic data also spooked investors, who worry that signs of a stronger economy could push the Federal Reserve to keep interest rates higher for longer as it struggles to bring down inflation.
The S&P 500 has finished higher for 23 of the past 30 weeks, marking a joint record since 1989, but is now heading for a negative week.
There had already been a relentless run of profits in recent weeks that was always going to be hard to sustain, Deutsche Bank analysts wrote on Thursday. It is clear that the moment is now more negative.
New economic data on Thursday showed that US gross domestic product in the first quarter was revised lower (1.3% from 1.6%) and that personal consumption is slowing. This is a sign that the economic expansion is cooling, which some analysts see as a double-edged sword.
The data may be a concern for companies and stock market investors, but on the other hand, slowing consumption and economic growth may be just the news we need to see in order for the inflation rate to continue to decline and allow the Fed to sit down. interest rates after all, Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, wrote on Thursday.
Meanwhile, all eyes are on the release of the Personal Consumption Expenditure index for April on Friday, the Fed’s preferred inflation gauge.
This story is developing and will be updated.
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