The ViacomCBS logo is displayed on the Nasdaq MarketSite. (REUTERS)

Nasdaq tumbles 2%, Dow falls 1.13% as tech shares prolong slide

Wall Avenue’s major indexes tumbled on Monday as heavyweight expertise shares dropped on expectations of a excessive rate of interest surroundings, which pushed U.S. Treasury yields to recent two-year highs and supported banks.

Megacap corporations together with Apple Inc, Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc fell between 2.1% and 4.4% in early buying and selling.

The S&P 500 shopper discretionary, expertise and communication providers sectors, housing main progress corporations, fell probably the most among the many 11 main S&P sectors.

The worth-oriented banks index hit a recent report excessive, earlier than retreating.

The S&P 500 and the tech-heavy Nasdaq indexes had been on target for his or her fifth straight day of declines as progress shares tumbled within the first week of 2022 after traders started to recalibrate their portfolios to account for a extra hawkish Federal Reserve.

Goldman Sachs expects the Fed to boost charges 4 instances in 2022, in comparison with its earlier forecast of three, and start the runoff course of for its stability sheet as quickly as July.

“Fears in regards to the Fed is the important thing this morning because it was actually final week. And you’ve got Goldman now anticipating to see 4 charge hikes in 2022 and that’s only a very hostile surroundings for tech and progress shares,” stated Thomas Hayes, managing member at Nice Hill Capital LLC in New York.

Tesla dropped 2.3% after Chief Government Officer Elon Musk tweeted on Friday that the electrical carmaker will increase the U.S. worth of its superior driver assistant software program.

Microsoft fell 2.7% after a media report that the software program firm has been dropping its augmented-reality expertise to friends like Meta Platforms.

Merchants have ramped up their charge hike expectations this yr after the U.S. central financial institution’s minutes from the December assembly urged an earlier-than-expected rise in charges.

Markets at the moment are anticipating a larger than 70% probability of an rate of interest rise to 0.25% in March and a minimum of two extra hikes by yr finish.

The benchmark 10-year Treasury yield hit 1.80% in early buying and selling – a stage final seen in early 2020. It shot up 25 foundation factors final week in its greatest transfer since late 2019.

Traders await inflation information this week for cues on shopper and producer costs, and whether or not they’ll sway the trajectory of the Fed’s rate of interest hikes.

At 10:10 a.m. ET, the Dow Jones Industrial Common was down 411.10 factors, or 1.13%, at 35,820.56, the S&P 500 was down 71.67 factors, or 1.53%, at 4,605.36, and the Nasdaq Composite was down 326.10 factors, or 2.18%, at 14,609.80.

Sportswear large Nike fell 4.1% after HSBC downgraded the inventory to “maintain” together with peer Adidas attributable to persistent provide chain points.

Declining points outnumbered advancers for a 4.10-to-1 ratio on the NYSE and for a 4.44-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and 4 new lows, whereas the Nasdaq recorded 53 new highs and 467 new lows.

This story has been revealed from a wire company feed with out modifications to the textual content. Solely the headline has been modified.

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