Tuesday, September 27, 2022

Nasdaq falls 2.8% for worst day since May as tech stocks tumble

28 September (WNN) — The Nasdaq Composite posted its worst day since May after tech stocks fell on Tuesday amid rising Treasury yields.

The tech-heavy Nasdaq fell 2.83% and the S&P 500 fell 2.04% as both indices fell for the second day in a row to start the week. The Dow Jones Industrial Average gained marginally from Monday, down 569.38 points, or 1.63%.

Shares of Google’s parent company Alphabet were down 3.72%, while Facebook declined 3.66% and Amazon 2.64%.

Tech stocks tumbled as yield rates rose sharply, reducing the value of their future cash flows.

The 10-year Treasury yield rose to 1.558%, the highest level since June. It was as low as 1.29% last week and as low as 1.13% in August.

“The market continues to come around to the reality that yields were far below fundamentals,” said Cathy Jones, chief fixed income strategist at the Schwab Center for Financial Research. “Now the Fed is shifting, and everyone is changing their position, all at once, as we do.”

Federal Reserve Chairman Jerome Powell also told the Senate Banking Committee on Tuesday that supply chain issues and pressures related to reopening could keep inflation going longer than expected.

Powell said, “These effects have been larger and longer-lasting than anticipated, but they will subside, and as they do, inflation is expected to fall back toward our long-run 2% target. “

Oil prices continued to rise for six consecutive sessions with West Texas Intermediate crude oil futures.

Shares of Ford were up 1.06% on Tuesday, linked to an economic reopening, as the company announced plans to build new production facilities in the United States.

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Nation World News Desk
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