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S&P 500 Sinks as Materials, Tech Weigh By Investing.com

by Mike Robinson

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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 fell Friday, led by material stocks following a slide in commodities while tech stocks were hurt by a climb in Treasury yields.

The fell 0.6%, the lost 0.9%, or 198 points, the Nasdaq slumped 1%.

Materials stocks continued to add to losses from earlier this week, with mining stocks adding pressure following an ongoing rout in commodities including iron ore.

Freeport-McMoran Copper & Gold (NYSE:), International Flavors & Fragrances (NYSE:), Nucor (NYSE:) led the decline in materials, with the latter down more than 3%

A fall in megacap tech stocks also weighed on the broader market, paced by a decline in Treasury yields.

Google-parent Alphabet, Apple (NASDAQ;), Facebook(NASDAQ:), Amazon.com (NASDAQ.:), and Microsoft. were all down.

The U.S. 10-year Treasury climbed to a more than one-week high, underpinned by positive economic data, and expectations the Federal Reserve is set to offer further clues on plans to tighten monetary policy at next week’s meeting.

In September, the University of Michigan reported that its preliminary consumer sentiment index increased to 71 from 70.3 in August.

“We expect the FOMC to open the door to a possible November taper announcement, conditional on a solid September employment gain,” Jefferies (NYSE:) said in a note ahead of the Fed meeting next week. 

Wall Street continues to feel the pressure, with the wider market set for a second week of losses. 

“Investor sentiment getting more bearish after the shallow declines of early September: we remain on guard for further volatility ahead as we make our way through the Sept-Oct window. Watch 4400+ for initial support on the S&P here (around the 50-day MA),” Janney Montgomery Scott said in a note. 

Although energy fell by more than 1% this week, it is still on track to end a losing streak of two weeks. This was despite strong gains made earlier in the week due to easing concerns about the effect that rising Covid-19 cases might have on energy demand.

Triple witching is when index options, index futures and index option contracts all expire the same day. This causes volatility and investors tend to move into new positions.

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