Stock Market Today: Crash? Not Today. But Stocks Still Feel Pain.

(Image credit: Getty Images)

You never want to see "#stockmarketcrash" trending on Twitter, but that's the kind of day Thursday was – or at least, the kind of day it looked like it was shaping up to be.

Selling started with an initial unemployment claims report that showed last week's claims rise to 745,000, though Anu Gaggar, senior global investment analyst for Commonwealth Financial Network, reminds us to "take it with a grain of salt as there is some impact of the winter storm in Texas here."

Kip 25 Update: Value Stocks Show Signs of Life

"Despite the rise and upward revisions, the four-week moving average in initial claims ticked lower to 791k, from 808k previously," adds Barclays' Michael Gapen and Pooja Sriram. "Initial jobless claims backed up in December and January following reductions in mobility and additional restrictions on activity that went into place in November to counter the rise in new COVID-19 cases last fall."

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

But the drop-off accelerated after Federal Reserve Chair Jerome Powell told a Wall Street Journal webinar audience that although he acknowledged inflation could pick up further, the central bank was likely to stand pat on policy.

Sign up for Kiplinger's FREE Investing Weekly e-letter for stock, ETF and mutual fund recommendations, and other investing advice.

The Nasdaq Composite plunged by as much as 3.4%, and in fact fell into correction territory (a 10% decline from a previous high) on an intraday basis, before recovering a little. It still closed off 2.1% to 12,723, on the back of large declines from Tesla (TSLA, -4.9%) and Nvidia (NVDA, -3.4%), among others.

The 15 Best Value Stocks to Buy for 2021

The Dow Jones Industrial Average (-1.1% to 30,924) and S&P 500 (-1.3% to 3,768) also finished in the red, though well off their lows.

Other action in the stock market today:

The small-cap Russell 2000 dropped 2.8% to 2,146.
Gold futures were off 0.9% to $1,700.70 per ounce.
U.S. crude oil futures jumped by 4.2% to $63.83 per barrel after OPEC+ nations agreed to continue their production cuts into next month.
That helped the energy sector lead again today, as evidenced by a 2.4% gain in the Energy Select Sector SPDR Fund (XLE), helped by a 3.9% surge in Exxon Mobil (XOM). The XLE is now up 35% year-to-date.
Bitcoin prices, like the rest of the market, dipped but finished off their lows, declining 5.4% to $48,329. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

The Smart Money Says to Keep Calm

Inflation worries certainly have the market's reins at the moment, but the tone from many market experts is: patience.

7 Best Value ETFs to Buy for Bundled Bargains

"Listen, the S&P 500 gained more than 75% and has started to weaken recently. Yes, the Nasdaq is nearly in correction territory, but the truth is this is how it works. Stocks are allowed to take a break," says Ryan Detrick, chief market strategist for LPL Financial. "The bright side is the economy continues to improve and leadership from financials and energy is something that suggests this isn't a 'sell everything' moment."

"There's a growing worry that the economy may be running away from the Fed. We understand that change can be nerve-wracking. And higher yields tend to hit high-flyers harder," adds Lindsey Bell, chief investment strategist for Ally Invest. "Keep calm for now. We don't think this drop is the beginning of something bigger, especially considering the strong trends in earnings and the economy. This might just be a healthy step back for a market that's rallied strongly since November."

Indeed, Bell suggests that if you've been raising a little cash, now might be the time to put some of that to work on suddenly discounted stocks – a strategy we've suggested investors take with these 10 growthy S&P 500 stocks, as well as these five travel stocks that might have gotten a little ahead of themselves.

You could also do the same in companies that are just a little farther afield. Many emerging markets such as China and Taiwan are also pulling back after a red-hot recovery rally, offering better prices on attractive names there.

If you're looking for pullback plays and want the added benefit of a little geographical diversification, consider these five large-cap emerging markets stocks that still have lots of upside to spare.

Disclaimer

Kyle Woodley was long NVDA and Bitcoin as of this writing.

The 21 Best Stocks to Buy for the Rest of 2021

TOPICS

Kyle Woodley is the Editor-in-Chief of WealthUp, a site dedicated to improving the personal finances and financial literacy of people of all ages. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.

You can check out his thoughts on the markets (and more) at @KyleWoodley.