US Stock Indexes Slide amid Market Jitters, Tech Leads the Drop

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Principal Points

• US stocks move lower on Monday, futures mixed on Tuesday
• Earnings season continues with Netflix reporting today

A Big Drop for US Stocks

US stocks marked their biggest one-day drop in a month yesterday. Following record closings on Friday, major indexes logged a day in the red, dragged down primarily by losses in the technology sector. Weak performance, however, was broad-based reaching from tech shares to retail stocks.

The drop on Monday was the biggest daily decline since March. The S&P500, after finishing at a record high on Friday, declined 0.53%, or 22.21 points, to 4,163.26. The broad-based benchmark index had registered a solid climb of four consecutive weeks as investors cheered positive economic data, suggesting rapid recovery and growth. The Dow Jones Industrial Average, also backing away from an all-time high on Friday, slid 0.36%, or 123.04 points, to end Monday’s session at 34,077.63. And the tech-heavy Nasdaq Composite dropped the most, 0.98%, or 137.58 points, finishing at 13,914.77.

Microsoft and Amazon dropped roughly 0.80% apiece, while Facebook ticked lower by 1.29%. Tesla knocked off 3.40%, or $25.15, to $714.63. Meanwhile, GameStop rose $9.68, or 6.3%, to $164.37 after the company said its CEO is stepping down. Apple and Google advanced on the day, up 0.58% and 0.31%, respectively.

Traders and investors kicked off the week with a risk-off approach to the market. Blue-chip companies and so-called growth companies are scheduled to report this week, and expectations are high as investors look to record numbers now that the government stimulus is fueling the reopening of the economy. Today, a string of large-cap companies report first-quarter earnings. Among them, Johnson & Johnson, Procter & Gamble, and Netflix. US equity futures on Tuesday point to a mixed open.

The European Outlook

In Europe, the pan-continental Stoxx 600 index dipped 0.1% for the day, after it hit a fresh session high in the early trading hours. The mixed performance carried European stocks throughout the day yesterday. The FTSE100 dropped 0.28%, and the German DAX declined 0.59%. The French CAC40 climbed 0.15%.

Bitcoin Stable Around $55k

On the cryptocurrency front, bitcoin looks to have stabilized around $55,000 after plummeting roughly 12% over the weekend and almost 20% from its all-time high on Wednesday. Weighing on the digital asset are concerns over Turkey’s ban on cryptocurrency as the country introduced regulatory restrictions. Speculations arose that the US Treasury could make a similar move after unconfirmed rumors surfaced that the US Treasury may soon charge several financial institutions of using cryptocurrency to launder money.

Dogecoin Goes From Strength to Strength

Dogecoin, the cryptocurrency created as a joke, has exploded to stratospheric levels and is arguably no longer viewed as a joke. Dogecoin has surged over 8,100% year-to-date. The return is more than double the S&P’s return for the past 30 years. The Shiba Inu-themed coin continues to march higher on Monday, as other digital assets, including bitcoin, drop in value. Dogecoin now hovers above the $53bn market cap with a price of $0.42 per coin.

The latest news around Dogecoin is that online forums have dubbed Tuesday, Apr 20, “Doge Day”. The retail trading community today aims to push the price of the token to $1. For this to happen, Dogecoin needs around $70bn of cash inflows into its capitalization or a total of $120bn.