Stock Market Craters For A Second Day In A Row

Wall Street tried to find its footing today after Wednesday's massive rout, but sellers still dominated as U.S. stocks dropped hard for a second day in a row on Thursday. The selling underscores investors' concerns over rising interest rates and a trade war, despite inflation data that was weaker than expected.

The Dow was briefly in positive territory twice earlier in the day, but it wound up closing down another 546 points, or 2.1 percent, on Thursday. The S&P 500 sank 2.1 percent, marking its sixth day of decline. Nasdaq ended 1.3 percent lower. 

Bond yields, which have spiked over the last week, slid on Thursday after the Labor Department said consumer prices grew only slightly in September. That's a sign inflation remains under control and suggests the Federal Reserve won't have to raise interest rates at a faster pace, which initially gave stocks a modest boost.  

The sell-off began on Wednesday when the Dow plunged 832 points, or 3.1 percent. It was the second-biggest drop of the year for the blue-chip benchmark after Feb. 5, when it lost over 1,100 points in a single trading session.

Following the plunge, President Donald Trump said the Federal Reserve "is making a mistake" to hike interest rates. "I think the Fed has gone crazy," he charged.

Trump causing "confusion"

The market is reacting to a "triple whammy" of rising interest rates, higher oil prices and a stronger dollar, according to Yardeni Research.

"The rally since early February may be stalling out on confusion about Trump's policies," Ed Yardeni, president and chief investment strategist, and his analysts wrote in a research note. "He seems to be stepping on the accelerator and brakes at the same time." 

While corporate tax cuts are boosting earnings, the ongoing trade war with China may disrupt supply chains and worsen, given the issues aren't only about trade but national security, he added.

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