April 2022 turned out as Nasdaq’s worst month since 2008. As a result, US stock index futures ended up flat during Sunday’s overnight trading. For the entire month, Nasdaq fell victim to high inflation and lower-than-expected earnings from the country’s largest tech firms.
Nasdaq Posts Worst Month In April, Other Indices Also Fell
While Nasdaq posted its worst month since 2008 last month, other stock indices also declined as well over the weekend. Futures contracts for the Dow Jones Industrial Average went down 11 points.
Meanwhile, S&P 500 futures fell flat. At the same time, Nasdaq 100 futures decreased by 0.2%. Earlier on Friday, the US Major indices suffered a brutal trading day, further decimating the market in April.
The Dow dropped by 939 points, which helped bring its total losses to 2.5%. Last week was the 30-stock benchmark’s fifth-straight negative week.
Meanwhile, the S&P 500 fell by 3.63% on Friday, which was its worst day since June 2020. The S&P is now on its fourth straight week of losses. Like the Down, the index fell on Friday, this time by 4.2%.
Both Dow Jones and the S&P 500 posted their lowest closes for 2022. Quincy Krosby, the chief equity strategist for LPL Financial, said the current market belongs to the traders.
“This has become a classic trader’s market as spikes in volatility and increasingly bearish headlines reverberate,” he said. Both Dow and the S&P ended up with their worst month since March 2020. The Dow finished 4.9% lower in April 4.9%. Meanwhile, the S&P tanked 8.8% during the same period.
Heavy Selling for Nasdaq in April, Leading to its Worst Month Since 2008
If the Dow and the S&P had it bad in April, Nasdaq had it even worse. The composite index plummeted by 13.26% in April. This is the index’s worst month since 2008.
Large tech companies such as Amazon, Netflix, and Meta Platforms headlined the underperforming companies that led to Nasdaq’s drop.
Krosby said that less-optimistic guidance from tech titans Amazon and Apple made things worse. Their adjusted guidance “exacerbated concern” about the country’s economic outlook.
”Intractable supply chain issues, and rising energy prices” may find it harder for a suddenly hawkish Fed to create a soft landing.
Netflix Also Suffers Worst Month Since 2017, Loses Half its Value
Netflix, one of the stock market’s biggest stock darlings during the pandemic, is now down nearly 50% over the last month. Meanwhile, other pandemic performers such as Amazon and Meta fell down by 24% and 10.8%.
In a rising interest rate environment, tech stocks are getting hit hard. These companies’ elevated valuations and potential for future growth are now getting increased doubts.
Even as Nasdaq fell down for the month, the majority of S&P 500 companies are reporting bumper months. 80% of the 275 S&P 500 companies that reported their quarterly results beat earnings estimates. In addition, 73% of these companies beat revenue expectations.
Earnings season for companies is halfway complete. On deck for the upcoming week are a number of consumer-facing restaurant chains and travel companies.
These include Expedia, MGM Resorts, Airbnb, Starbucks, Lyft, Marriott, TripAdvisor, and Yum Brands. Other big-league companies also set to report their numbers are Uber, eBay, and Pfizer.
Investors Anticipating FOMC Announcement of Interest Rate Hike
On Wednesday, investors are anticipating the Federal Open Market Committee’s announcement on its monetary policy. It’s all but certain that the Federal Reserve will adopt an interest rate hike by 50 basis points this month.
The higher borrowing rates can pressure companies from holding back on their expansion plans. On the back of higher prices and consumer scalebacks, investors might not find anything to cheer about in the next few months.
Watch the Bloomberg Markets and Finance news video reporting that Nasdaq drops again, has worst month since 2008:
What do you think of the Fed’s anticipated interest rate hike this month? Will this help control inflation as advertised? Let us know what you think. Share your comments below.