Wall Street’s main indexes fell on Monday as heavyweight technology stocks tumbled on expectations of a higher interest rate environment that pushed US Treasury yields to two-year highs and backed banks.
Megacap companies including Apple Inc, Amazon.com Inc, Microsoft Corp, Meta Platforms Inc and Tesla Inc fell between 2.1% and 4.4% in early trade.
The S&P 500 consumer discretionary, technology and communications services sectors, housing major growth companies, fell the most among 11 major S&P sectors.
The value-oriented bank index hit a new record high before retreating.
The S&P 500 and the tech-heavy Nasdaq index were in for their fifth straight day of decline, as growth stocks tumbled in the first week of 2022, when investors began to recalculate their portfolios to account for the more hawkish Federal Reserve. Was.
Goldman Sachs expects the Fed to raise rates by four times its previous three forecasts in 2022, and will begin the runoff process for its balance sheets as soon as July.
Thomas Hayes said, “The fear about the Fed is the key this morning as it certainly was last week. And you have Goldman now expecting four rate hikes in 2022 and that’s a good one for tech and growth stocks.” It’s a very hostile environment.” Member at Great Hill Capital LLC in New York.
Tesla dropped 2.3% after Chief Executive Officer Elon Musk tweeted on Friday that the electric carmaker would raise the US price of its advanced driver assistant software.
Microsoft fell 2.7% after a media report that the software company was losing its augmented-reality talent to peers like Meta Platform.
Traders have sharpened their rate hike hopes this year after minutes from the December meeting suggested a earlier-than-expected rate hike by the US central bank.
Markets are now expecting more than 70% of the interest rate hike to 0.25% in March and at least two more by the end of the year.
The benchmark 10-year Treasury yield rose to 1.80% in early trade – a level last seen in early 2020. It rose 25 basis points last week in its biggest move since the end of 2019.
Investors await inflation data this week for clues on consumer and producer prices, and whether they will affect the trajectory of the Fed’s interest rate hikes.
At 10:10 am, the Dow Jones Industrial Average was down 411.10 points, or 1.13%, at 35,820.56, the S&P 500 was down 71.67 points, or 1.53%, at 4,605.36 and the Nasdaq Composite was down 326.10 points, or 2.18. %, at 14,609.80.
Sportswear giant Nike fell 4.1% after HSBC forced HSBC to “hold” the stock with peer Adidas due to persistent supply chain issues.
Issues that declined to a 4.10-to-1 ratio on the NYSE and to a 4.44-to-1 ratio on the Nasdaq outweighed the advances.
The S&P index recorded 35 new 52-week highs and four new lows, while the Nasdaq recorded 53 new highs and 467 new lows.
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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