With the Dow Jones down more than 1,000 points, signs of panic selling appear in the stock market

The panic-like behavior on Wall Street began Thursday, at least from a technical perspective, as the Dow Jones Industrial Average gave up the previous day’s gains, and then some.

Trading in New York-listed stocks at midday Thursday showed a panic-like selling as bullish investors suffered a strong wealth reversal that appeared to be gathering steam in the wake of the Federal Reserve’s monetary policy meeting in early May, adding to the bruising. Extended to buyers, due to concerns about pricing.

The NYSE Arms Index, a volume-weighted breadth gauge that tracks the ratio of advancing stocks to declining stocks over the ratio of advancing volume to declining volume, was showing a reading of 2,588 for stocks listed on the New York Stock Exchange. Many technicians say that a rise to at least 2.000 indicates panic selling behaviour.

The reading comes based on the Dow Jones Industrial Average,
-2.96%
It fell 3.1%, or more than 1,050 points at 33,027, given its biggest one-day drop since 2020; S&P 500 SPX Index,
-3.35%
It was down 3.4% at around 4,150; and the Nasdaq Composite Index,
-4.72%
It was trading down 4.7% at 12365.

However, the Nasdaq IRM index did not show panic selling, with its level at 0.972, at the last scan on Thursday afternoon.

The downside comes after Federal Reserve Chairman Jerome Powell said on Wednesday that the central bank was unlikely to raise the benchmark interest rate by 75 basis points at its next meeting, a comment that immediately sent stocks higher and the dollar temporarily lower. These trends, however, were Reverse course on Thursday.

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Market participants indicate continued rise in returns, on a nominal and, real foundationwhich represents inflation, for selling in the market.

10-Year Treasury Bond Yield TMUBMUSD10Y,
3.099%
It was jumping to the highest rate since 2018.

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