On the 21st (local time), the New York stock market started lower, continuing a five-week decline.
The causes are largely analyzed into three factors: the expectation of a 'Fed Put' (Federal Reserve intervention in the market) that emerged right after the Federal Open Market Committee (FOMC) meeting in March quickly faded, President Donald Trump reiterated the policy of imposing reciprocal tariffs, and concerns about a recession. As a result, the sentiment of 'risk aversion and preference for safety' seems to have strengthened again.
As of 10:30 a.m. on this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, a group of blue-chip stocks, recorded a drop of 375.57 points (0.90%) to 41,577.75.
The large-cap benchmark S&P 500 index dipped 42.16 points (0.74%) to 5,620.73, while the tech-heavy Nasdaq Composite index fell 111.11 points (0.63%) to 17,580.51.
The Volatility Index (VIX), compiled by the Chicago Board Options Exchange (Cboe), is indicating 20.35, up 0.55 points (2.78%) from the previous day.
The S&P 500 index and Nasdaq index are facing a five-week decline on a weekly basis.
The Nasdaq index has not escaped the correction territory (down more than 10% from recent highs). All three major indexes also closed down the previous day.
On this day, President Donald Trump referred to the date of reciprocal tariff enactment, set for the 2nd of next month, as 'American Liberation Day' on his social media, Truth Social, stating, 'For decades, we have been deceived and abused by every country in the world, friends and foes alike. It's time for us Americans to finally reclaim our money and respect.'
The situation in the Middle East is deteriorating. As Israel resumed airstrikes in the Gaza Strip targeting the Palestinian militant group Hamas on the 18th, the Israeli Minister of Defense ordered the military to advance deeper into Gaza, stating, 'We will not stop until Hamas releases all remaining hostages.'
Heathrow Airport, a major gateway in Europe, has been closed completely due to a large-scale power outage caused by a transformer fire, creating chaos in global air traffic and impacting airline-related stocks.
The major U.S. airlines United Airlines, Delta Air Lines, and American Airlines all started trading down in the range of 2% to 3%.
U.S. semiconductor manufacturer Micron Technology reported strong results and a positive outlook driven by a surge in artificial intelligence (AI) memory chip sales but still saw its stock price drop by more than 7%.
Nike, the world's largest sportswear manufacturer, which is pushing for a turnaround, reported good results with earnings per share (0.54 dollars) doubling the market expectation (0.29 dollars) and a narrower revenue decline than anticipated, yet its stock fell by more than 6%. This drop is attributed to the company’s expectation that current quarter revenues may fall short of market expectations due to tariffs and consumer contraction.
FedEx, a major U.S. express delivery service provider, saw its stock plunge more than 9% after adjusting its annual performance outlook downward, despite reporting quarterly revenues that exceeded market expectations due to economic slowdown and uncertainty.
On this day, shares of FedEx competitor UPS are also down in the 3% range.
IonQ, a quantum computing corporation, saw its stock drop 9.27% after NVIDIA held 'Quantum Day' on the fourth day of its artificial intelligence (AI) developer conference (GTC), highlighting the current and future of quantum computing, but has since rebounded by over 5% today.
Among the large tech stock group known as 'Magnificent 7' (M7), Apple, Alphabet (Google's parent company), Tesla, and Meta (Facebook's parent company) opened higher, while NVIDIA, Microsoft, and Amazon opened lower.
Benjamin Schroeder, an analyst at ING, noted, 'The effects of the FOMC March meeting appear to have ended in just one day.'
Michael Green, chief strategist at Simplify Asset Management, stated, 'Concerns over tariffs are placing a burden on corporations.'
He mentioned that 'corporations are increasingly mentioning confusion and uncertainty related to business plans, capital expenditure, and new hiring,' suggesting that if corporate activity stagnates, economic growth could also slow, and such concerns are being reflected in the markets.
Chicago Federal Reserve Bank President Austan Goolsbee commented in an interview with CNBC that '(Trump's second term) tariffs may have a largely temporary impact on inflation,' while also noting, 'Retaliatory tariffs from counterparties may lead to Federal Reserve responses.'
According to the Chicago Mercantile Exchange Group's FedWatch Tool, the probability that the Federal Reserve will lower the benchmark interest rate by more than 25 basis points (1 basis point = 0.01%) in the first half of this year increased by 2.8 percentage points to 75.4% as of one hour after the opening.
The possibility of further reductions of two times (each 25 basis points) in the year has been reflected at 88.9%, and the likelihood of three or more reductions is reflected at 62.6%.
Meanwhile, European stock markets are also showing a declining trend today.
The pan-European index STOXX 600 has dropped by 0.85%, the German DAX index by 1.07%, and the British FTSE index by 0.79%.
International oil prices are stable.
The price of West Texas Intermediate (WTI) crude oil for May delivery is trading at $68.20 per BARREL, up 0.19% from the previous session, while the price of Brent crude oil for May delivery is $72.01 per BARREL, up 0.01%.