Stock Market Today: Selloff? What Selloff? Morning Plunge Quickly Evaporates
The Nasdaq spewed red ink to kick off Tuesday morning but recovered most of its ground, with Fed comments helping to soothe investor concerns.


Well, that was a turn of events.
At Tuesday's open, Wall Street appeared determined to continue the recent bloodletting in technology stocks. The culprit, again, was inflation fears.
"(There's a) sudden realization that huge amounts of fiscal and monetary stimulus could lead to rising inflation and interest rates," says Scott Knapp, Chief Market Strategist at CUNA Mutual Group. "The longer-duration technology names that led the market higher in the aftermath of the pandemic are leading it lower today as expectations about the economy change very quickly."
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However, after opening sharply lower and dropping further in the market's opening minutes, the tech-heavy Nasdaq Composite pivoted hard to the upside. Stocks were in part encouraged by Federal Reserve Chairman Jerome Powell's commentary about inflationary worries, saying "the economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved."
The Nasdaq, which was off by as much as 3.9% at its worst, closed with a mere flesh wound, dropping 0.5% to 13,465. That was reflected in the action of many of its largest components, including Tesla (TSLA, -2.2%) which was off by as much as 13.3%, and Apple (AAPL, -0.1%), which had sunk by as much as 6.0%.
Other action in the stock market today:
- The Dow rebounded from a 1.1% decline to a marginal gain, closing at 31,537.35.
- The S&P 500 similarly recovered, gaining 0.1% to 3,881.
- The small-cap Russell 2000 slumped again, shedding 0.9% of its value to finish Tuesday at 2,231.
- U.S. crude oil futures were off marginally to $61.67 per barrel.
- Gold futures also settled lower, off 0.1% to $1,805.90 per ounce.
- Bitcoin prices took it on the chin, swinging from $54,009 on Monday to $47,696 – an 11.7% decline. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
Take a Breath, Just Don't Let Down Your Guard
Crisis averted? Er … not necessarily. Knapp believes "this correction will likely continue due to exceedingly high valuations in previously favored names that preceded today's selloff."
He's not alone. Dan Wantrobski, technical strategist and associate director of research at Janney Montgomery Scott, notes that updated chart studies "indicate that the tech-laden Nasdaq-100 may continue to underperform ... on a short- to-intermediate-term basis; possibly even leading the charge in a bigger market correction this year than we have thus far experienced."
And Tony Dwyer, Canaccord Genuity analyst, says "It wouldn't take much of a rotation out of the (stay-at-home) theme to cause the S&P 500 to correct as the economic recovery theme outperforms" – meaning more pain for tech, but upside for favored sectors including industrials, energy, materials and financials.
Indeed, the likes of Visa (V, +1.8%) and Chevron (CVX, +1.3%) helped the Dow recover from a 1.1% decline to a marginal gain, closing at 31,537.35. And the industrial average, which isn't as heavily weighted in tech as its blue-chip index brethren, could continue to overachieve in this environment.
Just remember: All Dow stocks aren't created equally.
We've just taken a fresh look at the analyst community's consensus on the 30 Dow components, and they're definitely playing favorites at the moment. Read on as we look at each of these blue chip stocks, and explain what makes the pros lukewarm – or red hot – on each.
Kyle Woodley was long Bitcoin as of this writing.
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Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.
Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.
You can check out his thoughts on the markets (and more) at @KyleWoodley.
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