The Dow dropped 1000 a few days ago,

[House of Roberts]

and the pundits said it was due to fears of a rate hike.

Today we get a half point hike, and the Dow is up almost 900 at the moment.

What have I missed in this situation?

[Tommy Carcetti]

1. You miss that the Dow has the attention span of a 2 year old Golden Retriever.

Albeit far less cute.

[Brother Buzz]

6. LOL, I'm stealing that and I probably won't credit you for it

[former9thward]

11. Possibly more accurately the "experts" who analyze the Dow's ups and downs.

If the Dow is at let's say 34000 goes up 20 or down 20 I read reasons why it happened. That is crazy. It can't be determined what was in the minds of those making billions of buys and sells of stock.

[clementine613]

2. It's the Rethugs playing with the market.

The other day, they shorted it, so they made it go down. Today they need it to go up.

As long as it makes them money, they don't care if anyone else loses their investments.

[FBaggins]

3. That's an oversimplification

The possible scenarios are not limited to a rate hike or a lack of a rate hike. The fear a few weeks ago was for more and larger rate hikes than had previously been anticipated - potentially going too far too fast.

Todays hike was was more in line with what had preciously been expected.

[SoonerPride]

4. The DOW has been untethered the actual economy for decades now

Unemployment up?

The market goes up.

Unemployment down?

The market goes up.

Corporate earnings set records?

The market goes up.

Corporate earnings fall?

The market goes up.

Sure maybe not for a day or two for "profit taking" but they have figured out a system that perpetually rises regardless of what is happening to the rest of us.

[BruceWane]

14. There's always millions of buyers

One word - 401k

Every single day there's millions of dollars poured into the stock market due to the advent of the 401k. Millions of people who are essentially placing "buy" orders every time they receive a paycheck, regardless of what the actual market outlook looks like. This is why so many stock prices have nothing to do with actual company performance. Companies can lose money for years and years with no realistic projection of profitability while their stock price rises and rises.

[brooklynite]

15. No they don't

The market has been dropping most of this year, whether the issue is COVID/UKRAINE/INFLATION/INTEREST RATES etc.

[SoonerPride]

18. The market has a 1% problem just like the country

https://schiffgold.com/key-gold-news/the-stock-market-is-completely-untethered-from-economic-reality/

Here are a few market extremes Stockman notes.

Amazon is now 43% of the S&P 500 consumer discretionary index;
Nearly two-thirds of the market is underperforming so far this year;
Year-to-date, only one in three stocks is actually in the green;
One in five stocks is down 50% or more from its all-time high;
The five largest stocks in the S&P 500 have a combined market cap that equals that of the “smallest” 389 stocks;
Apple, Amazon, Microsoft, and Google—four companies—have a combined market cap (over $6 trillion) that is greater than the GDP of every country in the world, minus the US and China;
Tesla, having surpassed Walmart (with one-twentieth of the revenue!), has become the ninth-largest stock in the US.

A very few major stocks really drive the market as a whole.

If those top sliver of companies are doing well the market is up.

Concentration of capital in the hands of very persons or corporations skews everything.

[walkingman]

17. The Market these days is simply a sophisticated gambling casino. The talking heads will gladly

give an explanation of any moves up or down.

[bucolic_frolic]

5. The rate hike was old news by today

The rate hike was discounted by the days of fear and trembling.

[Turbineguy]

7. I've had it explained to me like this.

In normal life you are driving your car. Ahead of you, the door on a parked car opens. You swerve to avoid hitting the open door.

In stock trading you hit the door and take it off along with the arm of the person who opened it.

[SYFROYH]

8. Baked in expectations - reality is better than fears.

[Johnny2X2X]

9. They priced in the hike when they heard about it days ago

This is just a rebound to normal from that artificial mini crash.

[Tickle]

10. I thought it was

because of inflation.

[Beautiful Disaster]

12. The rate hike wasn't as high as they were predicting.

I believe they were expecting Powell to hike rates by 0.75% but he's ruled that out for now.

Plus, I'm pretty sure the latest on inflation suggests it's slipping down a bit.

[usonian]

13. This is how the stock market works. Sell on the blues, buy on the news. (or vice-versa, I forgot) nt

[Disaffected]

20. Some would say

sell on news. There are as many clichés and platitudes regarding the stock markets as there are investors.

[usonian]

22. Yes, it's usually buy on the blues and sell on the news.

But this is different from the usual quarterly results speculation. Had to reverse direction.
Then again, I forgot the question.
Getting old, but that beats the alternative.

[Shermann]

16. It's more of a volatility story than one of constant downward pressure nt

[Disaffected]

19. The stock market is driven by many

often unpredictable factors. In many ways it displays chaotic, random behaviour. This however does not discourage many folks from opining on why the market does what it does on any given day, week, or year.

The only reasonably predictable thing about the major indices is that they tend upwards in the long run. That is why "market timing" is a poor investment strategy - you may get lucky for a while but in the long run, you will very likely not come out ahead, or ahead at all, versus a buy & hold approach (and buy & hold a variety of well established, dividend paying companies). And, don't pay much attention to the "pundits" of whom there are many thousands, some professional, some amateur, and are as often wrong as right.

[relayerbob]

21. Sell on the rumor, buy on the news

The rate hike was already baked in, so just SOP. Wall st will prefer higher interest to higher inflation.

[Disaffected]

23. This, from another DU post, is v likely the main factor:

"In his post-meeting press conference on Wednesday, Fed Chairman Jerome Powell said that additional half-percentage-point rate hikes will be on the table for the next few meetings. But the bank isn't looking to go bigger:"

The last sentence is probably it.

[muriel_volestrangler]

24. The carousel continues: Dow plunges 1,000 points, wiping out Wednesday's surge

https://edition.cnn.com/2022/05/05/investing/dow-stock-market-news-today/index.html

Equivalent WSJ headline says "investors reassess Fed comments". So maybe they just felt like partying yesterday, and got round to doing the reading overnight.

[Emile]

25. The smoke coming out of their asses is going every

where. Their job is to blame everything on socialist spending and covering up for predatory capitalism.