The market’s wounds deepened Thursday, when the Dow Jones industrial average plunged 1.7% and all major indexes took their worst beating in three weeks.
All 30 Dow components closed lower, with industrials United Technologies (UTX), Boeing (BA) and Caterpillar (CAT) down about 3%. United Tech, Boeing, Intel (INTC) and other components suffered the worst losses in at least three weeks.
The Nasdaq and the S&P 500 skidded 1.3%. The Nasdaq closed near its 50-day moving average, where investors hope it can get a footing. But already the Dow and S&P 500 had fallen below their 50-day lines. Small caps performed better, with the Russell 2000 down only 0.3% at the close.
Volume was higher than Wednesday’s totals, according to early data. Losers topped winners by 3-2 on the NYSE and by 7-5 on the Nasdaq.
The market was spooked by news that President Trump will impose new tariffs on steel and aluminum imports, sparking fears of a trade war. Trump said he’ll authorize next week tariffs of 25% on steel imports and 10% on aluminum imports.
Steel producers cheered the announcement and were Thursday’s best-performing industry group, up 3.6%. Related groups such as specialty alloys, metals distributors and mining also advanced. Energy was another sector higher despite that the price of crude oil fell moderately.
Health care, retail and consumer stocks were among the weakest in today’s market. Alcoholic beverages, soft drinks, department stores and specialty consumer products slid 2% to 3%. Some cyclical groups such as construction and mining machinery also tumbled.
Stocks also have weakened on worries that rising inflation may cause the Federal Reserve to raise interest rates faster than planned. On Thursday, Fed Chairman Jerome Powell tried to calm those fears, telling the Senate Banking Committee that he doesn’t see much of a problem with inflation. Powell’s comments Tuesday were taken as hawkish, ending a rebound the stock indexes had been mounting.
Leading stocks were broadly lower. On the IBD 50, HealthEquity (HQY) fell nearly 6% and Nvidia (NVDA) more than 4%. Alibaba (BABA) closed below its 50-day line. A few stocks that tried to break out all reversed below their buy points.
