Wall Street falls on growth concerns dragging tech companies down

By: News Team

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Wall Street’s main indexes fell on Thursday for a third straight session of losses as investors fear the U.S. Federal Reserve’s aggressive approach to reining in inflation could trigger a recession.

* Ten of 11 major S&P sectors were lower in early trading, led by industrials and consumer discretionary stocks.

* On the S&P 500 and Nasdaq, stocks of large-cap growth and technology companies such as Apple Inc (NASDAQ: AAPL ), Amazon.com Inc (NASDAQ: AMZN ), Tesla (NASDAQ: TSLA ) Inc and Nvidia ( NASDAQ: NVDA ) Corp fell between 1.0% and 3.6% as benchmark US Treasury yields hit an 11-year high.

* Rising yields weigh heavily on tech sector valuations, which depend on high future earnings.

* The technology sector of the S&P 500 has plunged more than 27% so far this year, compared to the 21% decline of the S&P 500 index.

* “The interest rate hike imposed yesterday (Wednesday) and the more hawkish tone from the Federal Reserve will weigh on stocks in general and probably more on rate-sensitive sectors,” said Sam Stovall, chief strategist at CFRA Research investments.

* “I definitely see the market testing the June lows and there is a higher probability of new lows, as indicated by the rise in the 2Y yield, and the widening of the 2Y and 10Y yield curve inversion.”

* The S&P 500 is now 3.3% off its mid-June low, its weakest point of the year.

* The US central bank raised interest rates by 75 basis points on Wednesday and signaled its policy rate would hit 4.4% by the end of the year and peak at 4.6% by the end of 2023, a steeper and longer trajectory than the markets had anticipated. 

The Dow Jones Industrial Average was down 154.91 points, or 0.51%, at 30,028.87, while the S&P 500 was down 29.33 points, or 0.77%, at 3,760.60. The fell 126.41 points, or 1.13%, to 11,093.79.

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