The key indexes suffered steep losses to kick off the week and investors continued their rotation out of technology stocks as bond yields continue to rise.
The Dow Jones Industrial Average fell 323.54 points to 34,002.92, despite large gains in Merck. The S&P 500 fell 1.3% to 4,300.46. The technology-driven Nasdaq Composite was performed the worst in some terms, sliding 2.1% to 14,255.48.
Large tech stocks like Apple, Nvidia, Amazon, and Microsoft fell as investors sought to leverage bond yields. An increase in rates to end September also hugely affected highly valued tech stocks.
The 10-year Treasury yield saw a slight increase on Monday, selling around 1.48%, compared to a record-high yield of 1.56% recorded last week. This trend is driven by investors’ worry regarding the pressure of inflation and stricter monetary policy.
Social media giant Facebook dipped 4.9% after drawing criticism for a “betrayal of democracy” as alleged by a whistleblower who made her identity known to the public on Sunday.
Jim Paulsen, Leuthold Group chief investment strategist said: “commodities are rising, bond yields are rising, cyclical sectors and small-cap stocks are outpacing, and technology and growth stocks, in general, are underperforming.”
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