Stocks extend selloff after wipeout

Stocks Extend Selloff After Wipeout

April 4, 2025

Wall Street's recent turbulence showed no signs of calming on Thursday, as major U.S. stock indices extended losses in the wake of a broad-based selloff that rattled investor confidence and erased hundreds of billions in market value.

The Dow Jones Industrial Average dropped another 420 points, or 1.2%, to close at 34,105, compounding Wednesday’s 700-point rout. The S&P 500 fell 1.4% to 4,192, while the tech-heavy Nasdaq Composite slid 1.7% to finish at 13,260, marking its worst two-day stretch since October 2022.

The continued decline came amid a confluence of investor concerns, including persistent inflation, hawkish Federal Reserve rhetoric, and fresh signs of economic deceleration. Treasury yields remained elevated, with the benchmark 10-year note hovering near 4.65%, further pressuring equity valuations and reinforcing fears that interest rates will remain higher for longer.

Fed's Tone Turns Tougher

Minutes from the Federal Reserve’s March meeting, released Wednesday, revealed growing unease among policymakers about the stubbornness of inflation. Several officials indicated a willingness to hold interest rates at current levels beyond midyear if price pressures fail to recede meaningfully.

That tone rattled markets, which had previously priced in the likelihood of multiple rate cuts in 2025. Traders in futures markets have now pushed back expectations for the first cut to September or later, with odds of a June move dropping below 30%.

“The Fed is clearly not in a rush to ease,” said Emily Carter, chief investment strategist at Brightstone Capital. “That’s a stark contrast from earlier this year when markets were practically begging for a dovish pivot.”

Tech and Financials Lead the Decline

Technology stocks bore the brunt of Thursday’s losses, with megacaps like Apple, Nvidia, and Alphabet shedding between 2% and 3%. Chipmakers were hit especially hard after Taiwan Semiconductor warned of weakening demand in key end markets, citing inventory corrections and delayed orders.

Financial stocks also lagged, as concerns mounted over shrinking net interest margins and rising defaults. Shares of JPMorgan Chase and Bank of America each fell more than 2%, dragging the KBW Bank Index lower by 1.8%.

“Investors are starting to confront the double whammy of sticky inflation and slowing growth,” said Karen Liu, senior market analyst at Everguard Securities. “That’s a recipe for volatility.”

Investors Flee to Safety

As equities sold off, traditional safe havens gained traction. Gold surged above $2,350 an ounce, a new all-time high, buoyed by geopolitical tension in the Middle East and rising demand from central banks. The U.S. dollar also strengthened, with the DXY index climbing 0.5%, reflecting a global flight to safety.

Meanwhile, oil prices dipped, with WTI crude falling 1.3% to $83.20 per barrel, as traders weighed concerns over demand against ongoing production cuts from OPEC+.

Looking Ahead

With earnings season set to begin in earnest next week, investors will be looking for reassurance from corporate America. Analysts expect S&P 500 companies to report modest year-over-year profit growth, but any signs of margin pressure or reduced guidance could further unsettle markets.

“This selloff may not be over,” warned Carter. “Unless we get a soft inflation print or a surprisingly strong earnings season, investors should brace for more chop ahead.”

For now, Wall Street’s spring slump continues, and sentiment remains fragile. After the recent wipeout, many are wondering if this is merely a correction—or the start of something deeper.

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Disclaimer: The information provided in this article is for general informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.