Nasdaq was down to 3.4 Percent. Detailed outlook.
Nasdaq was down to 3.4%. Detailed outlook.
U.S. stocks slid on Monday as higher U.S. Treasury yields hit growth stocks amid prospects of aggressive monetary policy tightening, with investor sentiment taking a hit from fears of a sharp economic slowdown in China. All of the 11 major S&P sectors fell in early trading.
The energy sector tumbled 3.4% as oil prices fell more than 2%, sparked by weak China data and a tighter COVID-19 lockdown in Shanghai that deepened fears that the global economy is headed for a slowdown.
The tech-heavy Nasdaq dropped 3.4%, while the benchmark S&P 500 index hit its lowest level in a year as megacap stocks Microsoft Corp, Amazon.com, Apple Inc, Google-owner Alphabet Inc, Meta Platforms and Tesla Inc fell between 2.3% and 3.2%.
Benchmark 10-year U.S. Treasury yields were at 3.12% after hitting their highest levels since November 2018 earlier in the session as expectations of higher interest rates unnerved investors.
After a 50 basis points increase in interest rates this month by the U.S. central bank, many traders expect it to raise it by another 75 basis points at its June meeting.
"The market is focused on long-term interest rates. The higher they go, the more they're afraid of a recession or a stagflation economy," said Christopher Grisanti, chief equity strategist at MAI Capital Management in Cleveland.
"The fear has become so great that everything is getting sold, the proverbial throwing the baby out with the bathwater."
The U.S. Federal Reserve can stick to half point interest rate hikes for the next two to three meetings then assess how the economy and inflation are responding before deciding whether further rises are needed, Atlanta Fed president Raphael Bostic said.
At 09:56 a.m. ET, the Dow Jones Industrial Average was down 333.72 points, or 1.01%, at 32,565.65, the S&P 500 was down 62.00 points, or 1.50%, at 4,061.34, and the Nasdaq Composite was down 238.81 points, or 1.97%, at 11,905.85.
Technology-focused growth stocks have faced the brunt of the sell-off this year as their returns and valuations are discounted more deeply when yields rise.
The tech-heavy Nasdaq notched a fifth straight weekly loss on Friday, its longest losing streak since the fourth quarter of 2012.
The S&P 500 growth index has dropped nearly 22.8% so far this year, compared to a 13.5% fall in the benchmark index .
Declining issues outnumbered advancers for a 5.92-to-1 ratio on the NYSE and a 4.82-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 53 new lows, while the Nasdaq recorded seven new highs and 685 new lows. (Reporting by Devik Jain and Bansari Mayur Kamdar in Bengaluru; Editing by Sriraj Kalluvila, Arun Koyyur and Shounak Dasgupta)
Source Credit - Livemint
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