Wall Street Takes a Hit as Stocks and Gold Prices Decline

U.S. stocks and gold prices are experiencing a significant downturn on March 15, 2024, as market momentum on Wall Street sharply reverses. The S&P 500 index fell by 1%, indicating one of its worst performance days in recent months, although it remains close to its record high achieved earlier this month. The Dow Jones Industrial Average saw a decline of 417 points, or 0.9%, from its previous record, while the Nasdaq Composite dropped by 1.7% by 2:20 p.m. Eastern time.

The decline in U.S. markets has been exacerbated by a disappointing earnings report from Netflix, which posted weaker-than-expected profits for the latest quarter. The pressure is mounting on the video streaming giant, along with other companies, to demonstrate robust profit growth. This follows a notable surge of 35% in the S&P 500 since its low in April. Prior to the downturn, Netflix’s stock had risen by an impressive 39.3% for the year, far outpacing the S&P 500’s gains, but it saw a sharp decline of 9.9% on Wednesday.

AT&T also faced challenges, falling 2.4% after its profits merely met analysts’ expectations. In a more severe setback, Texas Instruments plummeted by 8% after reporting profits that fell short of forecasts. On a more positive note, Intuitive Surgical, a company known for its robotic-assisted surgical systems, saw its stock surge by 13.6% after exceeding profit expectations. Similarly, Boston Scientific climbed 4.3%, and Capital One Financial and Western Alliance Bancorp rose by 2% and 2.7%, respectively, following their better-than-anticipated profit reports. The news from Western Alliance was particularly encouraging, as it had previously raised concerns about potential loan defaults due to fraud.

A notable player in this volatile market is Beyond Meat, which experienced significant fluctuations in its stock price on Wednesday. After more than doubling in value during the morning, it ultimately closed up by 8.5%. This surge can be attributed to Walmart’s announcement that it will increase the availability of some of Beyond Meat’s products in over 2,000 U.S. stores. The company’s stock has skyrocketed nearly 509% this week, making it the largest holding in the Roundhill Meme Stock exchange-traded fund, which is popular among investors looking to capitalize on market momentum.

Gold Prices Decline Amid Market Turmoil

In tandem with falling stock prices, gold has also taken a hit, with its value dropping by 1.1% to $4,065.40 per ounce. This decline follows a significant 5.3% slide the previous day, which had already pushed gold off its record high. Despite this downturn, many factors that previously drove investors toward gold remain in place. There are ongoing expectations that the Federal Reserve may cut interest rates throughout the next year, coupled with persistent concerns about high inflation and escalating national debt levels worldwide.

Criticism has emerged around gold’s rapid price increase, which has outpaced even the U.S. stock market’s growth this year. Despite the recent decline, gold prices are still up approximately 55% for 2024.

International Market Reactions

Globally, stock markets displayed mixed reactions. In Europe, London’s FTSE 100 index increased by 0.9% following a report on U.K. inflation, which raised hopes for another interest rate cut next month. South Korea’s Kospi gained 1.6%, marking one of the world’s larger gains. Conversely, markets in Hong Kong and Paris fell by 0.9% and 0.6%, respectively.

In the bond market, yields on the 10-year Treasury eased to 3.95%, down from 3.98% late on Tuesday. This shift reflects ongoing adjustments in investor sentiment as they navigate the complexities of the current economic landscape.

As Wall Street grapples with these fluctuations, investors are keenly watching for signs of recovery and clarity on corporate earnings moving forward.