Stock Market Plunges: Dow Sinks 800 Points as Yields Rise, Trump Budget Stalls
Stock market losses deepened on Wednesday as major indexes dropped sharply in late afternoon trading. The Dow Jones Industrial Average tumbled more than 800 points, while the Nasdaq reversed earlier gains, driven by rising Treasury yields and political uncertainty in Washington over President Donald Trump’s budget plan.
Major Indexes Fall as Yields Climb
- The Dow fell 1.9%, dropping below its 200-day moving average — a key technical level.
- The S&P 500 also declined by 1.7%, and the Nasdaq lost 1.6% after giving up early gains.
- The Russell 2000 small-cap index dropped 2.3%.
- Innovator IBD 50 ETF broke its three-day winning streak, losing 1.33%.
10-Year Treasury Yield Hits 4.59%
Investors grew nervous as the 10-year Treasury yield surged by 11 basis points to 4.59%, signaling fears about inflation and higher borrowing costs. Meanwhile, Republicans in Congress struggled to gather support for Trump’s “big beautiful bill,” which includes changes to state and local tax deductions.
Trading Volume and Market Breadth Weakens
- Volume increased on both the NYSE and Nasdaq, a sign of strong selling pressure.
- Market breadth was negative, with declining stocks outnumbering gainers by 8-to-1 on the NYSE and nearly 3-to-1 on the Nasdaq.
Economic Data to Watch: S&P Global PMI
Markets are looking ahead to the S&P Global Purchasing Managers’ Index (PMI) report due Thursday. Forecasts suggest:
- Manufacturing PMI could drop to 49.8, down from April’s 50.2.
- Services PMI is expected to dip to 50.6, slightly below April’s 50.8.
Gold Stocks Shine as Safe Haven
While the broader market struggled, gold stocks saw gains:
- Agnico Eagle Mines rose nearly 3% and was added to the IBD Leaderboard.
- Newmont showed a bullish chart pattern with a buy point of 57.16.
- AngloGold Ashanti pulled back slightly but remained near a trendline entry around 43.41.
Nvidia Slides After CEO’s China Comments
Nvidia shares fell over 2% despite early strength. CEO Jensen Huang said U.S. chip export bans are ineffective, with China gaining ground in AI development. Huang noted Nvidia has lost market share to Chinese competitors over the last four years.
Alphabet Rises with AI Momentum
Alphabet (Google) defied the market trend, jumping nearly 4% after showcasing powerful AI tools at its I/O conference. Analysts praised its innovation, helping Google stock:
- Break above the 200-day moving average.
- Surpass an early entry point at 170.63.
- Become the top gainer in both the S&P 500 and Nasdaq.
Other Big Movers: Dycom, Tesla, Bitcoin
- Dycom surged past a buy point at 207.20.
- Argan entered a buy zone from 191.46.
- Tesla slipped after morning gains, even as CEO Elon Musk promised to focus more on the company. Musk teased a robotaxi launch in June. Analyst Dan Ives called this Tesla’s “golden era” and predicted a potential $2 trillion market cap.
- Bitcoin hit a record high of $109,298.77, boosted by Senate progress on stablecoin regulation.
UnitedHealth Drops After Downgrade
In the Dow Jones, UnitedHealth declined following a downgrade from HSBC, which cut the stock to “reduce” and lowered its price target to 270 from 490. The stock had enjoyed a three-day rally but remains in a long-term downtrend.
Apple, Cisco in Focus
- Cisco Systems is forming a bullish pattern with a buy point at 65.75.
- Apple faced resistance near its 50-day moving average, pulling back in afternoon trading.
Target and Palo Alto Networks Miss Earnings
- Palo Alto Networks dropped more than 5% despite slightly beating earnings expectations. Q3 earnings came in at 80 cents per share, topping views of 77 cents. Still, the stock slipped, testing its 50-day line after a failed breakout near 195.42.
- Target also fell over 5% after missing earnings estimates and giving a weak outlook:
- Q1 earnings: $1.30 per share, down from $2.03 last year.
- Revenue: $23.8 billion, below expectations of $24.22 billion.
- The company blamed tariff issues and soft demand, forecasting low single-digit sales declines for the full year.
Wolfspeed Crashes on Bankruptcy Fears
Wolfspeed stock plunged 70% following reports from The Wall Street Journal that the chipmaker may file for bankruptcy to resolve debt. Once trading at $142.33 in 2021, shares have collapsed to under $5.
