Dow Jones Falls 300 Points After Fed Minutes; Nasdaq Sell-Off Hits Nvidia, Tesla Hard

The stock market was sharply lower in afternoon trading Wednesday after the minutes from the March Federal Reserve meeting showed the Fed is ready to shrink its balance sheet by $95 billion a month. The Dow Jones Industrial Average held up relatively well, but the Nasdaq composite plunged below the 14,000 level, weighed down by weakness in Tesla (TSLA) and Nvidia (NVDA).

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WTI crude oil futures slumped 5% to $96.85 a barrel. The 2-year Treasury yield added 3 basis points to 2.53%. The 10-year yield was up

Stocks didn’t like comments from Fed Governor Lael Brainard Tuesday, who said the Fed will “continue tightening monetary policy methodically through a series of interest rate increases and by starting to reduce the balance sheet at a rapid pace as soon as our May meeting.”

The Fed currently holds $9 trillion in bonds and mortgage-back securities.

Tesla extended losses after Tuesday’s 4.6% drop. It looks poised for a test of the 1,000 level, which is pretty close to the 21-day exponential moving average.

Nvidia plunged below its 50-day moving average and the 250 level. Now, it’s testing the 200-day line.

Nvidia and Tesla are longtime members of Leaderboard.

Dow Jones Today

Health care stocks like Amgen (AMGN), Johnson & Johnson (JNJ), Merck (MRK) and UnitedHealth Group (UNH) were top gainers in the Dow Jones today, but technology stocks in the Dow like Apple (AAPL), Microsoft (MSFT) and Salesforce (CRM) lagged badly.

Apple stock has held up better than a lot of other technology stocks. It’s only 6% off its high as it tests support at the 21-day line. A 176.65 buy point is still in play.

Join IBD experts as they analyze leading stocks in the stock market rally on IBD Live

Microsoft, meanwhile, is near a test of its 50-day moving average, which is just below the 300 level.

The S&P 500 gave back 1.3%, but buyers pushed fertilizer stocks like Mosaic (MOS) and CF Industries (CF) higher again. It’s tempting to chase highfliers like this, but both MOS and CF are too far extended past proper buy points. Both stocks are members of the Chemicals-Agricultural group, which was up 1.5%.

Inside the MarketSmith Growth 250, coal stocks outperformed early but were off highs in afternoon trading. Arch Resources (ARCH) is making a first test of its 10-week moving average, a key support level to watch, since a breakout from a base. Warrior Met Coal (HCC) is also testing its 10-week line for the first time after a breakout. A bounce with conviction off the 10-week line would put both stocks in follow-on buy zones.

Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insight.

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