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Market Recap: Tuesday, May 12

The three major indices posted their largest one-day drop in seven sessions, with each falling at least 1.89%. The Nasdaq’s drop broke a six-session winning streak, which had been the index’s longest so far this year. The Final Round panel goes over the day's market action.

Video Transcript

JENNIFER ROGERS: We've got about 30 seconds before the closing bell on Wall Street. Right now, getting a little bit of action here in the last few minutes of trading-- had been a relatively quiet day. We'd been commenting on that around 3 o'clock. Right now, though, we are seeing some selling-- a sustained selling here pushing us to session lows. The Dow dropping more than 400 points. S&P right now off just about 55. And the Nasdaq off almost 2%. That's going to do it for the day.

[RINGING]

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[POUNDING]

Selling pressure in the final minutes of trading here to put us in the red across the board. Nasdaq's been up some six days. Not to be a seventh year, Nasdaq will end down more than 2%. The Russell, the worst performer here off nearly 3%, about a 2.8% VIX here back above 30 as well. Just checking out some of the big cap names that we've been talking about in the three just that the tech stocks that have been on fire recently.

We are going to end with the whole FANG basket in the red right now. Microsoft, Google, and Amazon all off more than 1%. I want to bring in my co-host Myles Udland to dissect a little bit of what we've seen here. So Myles, as we noted earlier, it seems a quieter day than usual than what we've gotten used to. The selling here at the end, we're continuing this reopening debate-- which companies are going to come out the other side of this stronger and who is going to be in jeopardy. What do you make of the trade today?

MYLES UDLAND: Yeah, I mean, it's certainly a messy day and I think unfortunately reminiscent of a lot of the action that we saw kind of in the throes of this sell-off back in March and even in early April, as we started to stabilize it. Still, that last 30 minutes of the session, we saw these panic buy days. Market was up 3%, 4% last 30 minutes. And the same thing on the downside.

I mean, today, we came on the air, the Dow was down, I think, 33 basis points-- 35 basis points-- something like that. We're finishing today's session off nearly 2%. So just a wave of selling into the close. And I think, you know, Jared laid out some of the technical levels that traders are going to be looking at. And certainly the mood for weeks has been people want their time to sell their excuse to sell.

I don't know if any news today is going to be enough to push it. I mean, maybe you could say it's over Grubhub top. But that news was out early in the morning and that mid-morning. And that didn't move the market all too much. Maybe it's buy the rumor of the Fed coming in, even though that was actual news. Sell the event of the Fed finally getting in to the ETF market. Maybe there's nerves around what Powell says.

I mean, we can kind of back fit anything with a messy close like this. But what is clear is that for the first time in really a couple of weeks, you saw a lot of sellers move into this market and put a lot of-- a lot of stock on the market. And it certainly impacted things.

As we headed towards the bell, I think it'll be very interested to see kind of how we opened. Does the futures market once again become an event overnight? Or is this-- is this the beginning of a new period of volatility? Or is this kind of a one-off on our journey here?

JENNIFER ROGERS: Well, Rick, certainly we've been talking a lot about this bifurcation between what the market's doing-- what the economy is doing today. Some news on the Boeing front. Boeing CEO saying that he sees a major US airline will most likely fold by September. That was a headline that was out there. I do want to note on the Dow, only Walmart ended in the green for today.

But this idea that the stock market has gotten further ahead than the economy and that the stock market is undeservedly gone so far is still out there. The idea that, you know, this is just one day. It's our worst day in seven sessions. But still, it's just one day. The optimism on the street-- there's still a lot of positive bulls out there right now.

RICK NEWMAN: Yeah, so market is basically, to my mind, priced in a V-shape recovery, which most economists think we're not going to have. And the market also seems to have priced in this idea that things are going to go more or less perfectly right on a consistent basis. You keep hearing this phrase, we think the worst is in the rearview mirror.

Well, maybe it is. But you have to remember that even if the worst is in the rearview mirror, you can still have all kinds of turbulence ahead. And that's what Dave Calhoun, the CEO Boeing was talking about. That's a terrible notion that we could lose one of the four major airlines. We do not have too many airlines. If anything, we have too few airlines for, at least, a healthy travel market.

And if we got back to normal, you know, months or years in the future with down to three airlines, I think you'd see prices going way up. You'd see basically monopolies or duopolies in a lot of parts of the travel market and other problems that consumers would not be happy with. So that is something to pay attention to for sure.