The Dow Jones Industrial Average fell 2.09% to 33,962.04 points. This is already far from his record of 35,092 points, scored in the session on May 10 last year.
Standard & Poor’s 500 dropped 1.59% to 4,258.49 points. This came after Wednesday set a new all-time high of 4393.68 points last week.
On the other hand, the tech Nasdaq Composite fell 1.06% to 14,274.98 points. During intraday trading on the 14th, he set the highest value on record – 14,814.69 points.
Concerns about the covid-19 delta option, which could derail the global economic recovery, are forcing investors to move away from risky assets like stocks and place bets on safer values like liabilities.
Today in the US, interest rates on 10-year Treasuries are trading at their lowest level in five months, below 1.20%.
This fall in debt interest rates, fueled by an increase in bond investment, has penalized publicly traded financial sector companies such as banking and insurance, which benefited from rising yields earlier this year.
Fall of the Dow Jones index by 900 points
Market participants are increasingly reluctant to take risks, and the Dow Jones index even fell 900 points in the session. At the end of the day, it lost 725.81 points (2.09%).
Thus, it was the worst day for the Dow since the 943-point drop in late October. What is considered a barometer for the blue-chip market has seen several more significant drops since the beginning of 2020 due to pandemic fears.
Over the past year, the Dow Jones has dropped more than 1,000 points six times, five of which occurred in March when covid entered the US. Its biggest drop in pips occurred on March 16, 2020, when it fell nearly 3000 pips (13%).
Recall that the term “blue chips” was coined in 1923 by Dow Jones employee Oliver Gingold. He coined a term inspired by the most expensive poker chip, highlighted in blue, to refer to high-value stocks. Today, the term “blue chips” no longer refers to the most expensive stocks, but to well-known stocks that have stood the test of time.
Aviation, hospitality, energy in red
The aviation, hospitality and other segments most affected by possible new covid-19 restrictions were among the biggest losses of today’s session, as was what happened in the early days of the pandemic.
Shares of American Airlines, United and Delta fell more than 4%. Cruise lines Carnival, Royal Caribbean and Norwegian lost 4% to 6%.
Energy prices have also declined due to a sharp drop in oil prices after members of the Organization of Petroleum Exporting Countries and their allies (the so-called OPEC + group) reached an agreement yesterday on production volumes until August, which will bring more raw materials to the market.
Although the market is currently limited (supply is not keeping pace with the growth in demand), the fact that more and more “black gold” is coming at a time when the increase in the number of covid-19 infections leads to new restrictions, causes caution among investors.
Shares of Chevron and Exxon Mobil fell more than 8%.
