Stock Sell-Off Intensifies As Investors Quit Cheering On Bad Economic News

The Dow fell 260 points, or 0.8%, while the S&P 500 and tech-heavy Nasdaq dropped 0.8% and 1%, respectively, as each index looks to bounce back from their worst years since 2008 as the Federal Reserve’s hiked interest rates at the fastest pace in decades in its effort to tame inflation.

Thursday’s slip comes as investors digested the latest economic data laying forward an uncertain path for the economy as it flirts with a recession.

The number of new constructions breaking ground and the amount of new building permits each slipped further in December to multi-month lows; the Philadelphia Fed’s monthly manufacturing index registered its fifth straight negative sentiment reading; and initial jobless claims slipped to their lowest level since September, indicating the labor market remains strong despite the Fed’s best efforts to tame growth.

Data continues to paint an unclear picture after several indications of growth ground to a halt Wednesday, with retail sales revealed to be down 1.1% from November to December and Microsoft become the latest technology behemoth to drastically reduce its workforce, announcing it will fire 10,000 employees over the course of 2023.

After months of stocks mostly rising following the release of any data indicating the American consumer is weakening—or any other signs of a slowing economy that may inspire the Fed to slow interest rate increases or even cut rates—tides have officially turned as investors largely refocus on how severe an upcoming downturn may be.

“Bad news [is] no longer enjoying a warm welcome by traders and investors alike,” LPL Financial’s chief global strategist Quincy Krosby said in emailed comments, adding, “just some weeks ago…markets [were] cheering the weaker data.”