Closing the session on May 11 (morning 12/5 Vietnam), the US industrial index Dow Jones decreased by 470 points (equivalent to a decrease of 1.4%). This is the strongest decline in the past 3 months.
The drop was triggered by a strong sell-off in technology stocks. These are the growth companies and the biggest winners of the pandemic. However, worries about returning inflation and the high valuations of technology stocks have changed the situation.
The force of profit-taking on technology stocks spread throughout the market and caused the majority of stocks to sink in the red.
Although not as popular as it was earlier this year due to fears of rising inflation and higher interest rates, technology stocks still have a fairly strong demand. Short-sellers of technology stocks returned to buy (short covering) to close their positions to sell and collect cash, making these stocks recover at the end of the session.
Some impressive recovery codes like Amazon and Netflix turned up by more than 1%, Facebook increased by 0.2% ... helping the market less gloomy.
The major US technology corporations have recorded impressive profits in recent times and are expected to still have good business results in 2021. However, a policy reversal could make the profits of the company. these businesses decline.
Recently, the US witnessed an erratic recovery in the labor market. This is the factor that makes many people still bet on the possibility that the US Federal Reserve (Fed) will still take a long time to consider adjusting to raise interest rates.
The President of the Fed branch in New York, John Williams, said that the US economy this year is likely to grow 7%, the fastest rate in nearly four decades, and that short-term inflation spikes accompanied by momentum. economic recovery will not be too much of a concern.
The world’s largest economy will need a strong job market in the next few months to achieve a full recovery. Therefore, the Fed will not be in a hurry to change the existing stimulus policies. Inflation is forecast to return to the 2% target by 2022 after the price situation and price imbalance take place in the short term.
However, America is considered to still have a long way to go to achieve a strong and comprehensive economic recovery.
