Wall Street Has the Post-Election Blues

Dow drops 647 points, cryptocurrencies plummet
By Newser Editors and Wire Services
Posted Nov 9, 2022 3:41 PM CST
Wall Street Has the Post-Election Blues
Signs point to the entrance of a polling site in Cranston, RI.   (AP Photo/David Goldman)

Wall Street closed sharply lower Wednesday, giving back a big chunk of the gains built in a three-day rally running up to Election Day. The S&P 500 fell 79.54 points, or 2.1%, to 3,748.57. The Dow Jones Industrial Average fell 646.89 points, or 2%, to 32,513.94. The Nasdaq fell 263.02 points, or 2.5%, to 10,353.17. Several sources of disappointment were behind the drop, the AP reports. There’s still uncertainty about whether Tuesday’s elections will result in a divided Congress that would prevent the kinds of economic policies that make Wall Street nervous. A batch of sour profit reports also hurt, while cryptocurrencies plunged again amid the industry’s latest crisis of confidence.

Looming over all of it is a report scheduled for Thursday, when the US government will show just how bad inflation was across the country. That reading will likely have a big effect on how much further the Federal Reserve hikes interest rates to get inflation under control. Those rate hikes have been by far the dominant force shaking Wall Street this year. "This is like a marathon and we’re in the early part of it," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. The Federal Reserve has already hiked its key overnight interest rate up to a range of 3.75% to 4%, up from virtually zero in March, and a growing number of investors expect it to top 5% next year.

Cryptocurrencies have felt some of the worst pain from the Fed’s whiplash move away from the record-low interest rates it instituted during the recession caused by the pandemic. Bitcoin fell even further Wednesday, below $16,900 from its record of nearly $69,000 almost exactly a year ago. It's down almost 25% over the last few days. This latest plunge for crypto, including an 11% drop for ethereum, comes amid worries about the financial strength of one of the industry’s biggest trading exchanges, FTX. A mega player in the industry, Binance, said on Tuesday that it planned to buy its troubled rival to help it manage a crunch where users had been scrambling to pull their money out. But a report on Wednesday from industry website CoinDesk suggested Binance may walk away from the deal.

story continues below

Stocks of companies embedded in the crypto economy also continued to sink. Robinhood Markets lost another 13.8% and is down 31.5% so far this week. Coinbase Global fell 9.5% to bring its drop for the week to 21.4%. Elsewhere on Wall Street, Disney sank 13.2% for the largest loss in the S&P 500 after reporting results for the latest quarter that fell well short of analysts’ expectations. It also gave a weak earnings forecast. Facebook parent Meta Platforms was a bright spot. It rose 5.2% after saying it will cut costs by laying off 11,000, or about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes.

(More stock market stories.)

Get the news faster.
Tap to install our app.
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.