Now, many investors are asking a very simple question – why are stocks going down today? If the answer is simple …
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There is a lot going on in the stock market. More specifically, macro catalysts are not favorable for investors in most sectors. While commodities, finance and other stocks that could benefit from rising inflation and higher interest rates continue to perform decently, most growth sectors such as technology are severely hurt today. For investors in companies such as Asana (NYSE:WHERE), Tesla (NASDAQ:TSLA), Service Today (NYSE:NOW) at Apple (NASDAQ:AAPL), it was a difficult day.
Interestingly, each of these companies is in a different sector. In many ways, many will like each of these stocks. For investors who have been thinking for a long time, these four companies have been winners over almost all of the past decade. However, it appears that the tides are changing in the financial markets.
Let’s examine what is driving these stocks down today.
Why Are Stocks Down Today?
As most investors know, the stock market is trying to price some hard-to-assess catalysts right now. Foremost on the minds of most investors today is the ongoing Russia-Ukraine conflict. Although it appears that we are still far from an all-out war, it is the closest the entire generation of investors has to feeling the impact of what could be a massive international conflict. This macro headwind brings together other important issues such as surging inflation and the threat of rising interest rates. Overall, the broad outlook for equities does not look positive today.
In addition, a range of disappointing earnings that have emerged over the past week suggests that growth may slow for many large growth stocks. These four companies each have closely monitored barometers of economic performance inside and outside the country. Further disruption of global trade, or inflation that is really out of control, could result in slower growth in the near term. These are all headwind investors trying to wrap their heads right now.
Ultimately, it appears that investors are focusing on risk management rather than profit maximization today. Accordingly, this risk-off view is one that may not be good for these major stocks, even in the near term.
At the date of publication, Chris MacDonald does not (whether directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the authors, subject to the InvestorPlace.com Publishing Guidelines.