Stock Groups

S&P 500 Slumps as Rising Yields Trigger Sea of Red By


© Reuters.

By Yasin Ebrahim – The S&P 500 fell Tuesday, as tech stocks slumped following a surge in Treasury yields and signs of consumer weakness at a time when concerns about a more sustained pace of inflation continue to heat up.

The fell 1.8%, the slipped 1.6%, or 507 points, the Nasdaq slumped 2.6%.

The topped 1.5%, rising to its highest level since June, as investors fret about the prospect of the Federal Reserve raising interest rates sooner than expected to control inflation.

Desjardins wrote in a note that “the many supply-demand imbalances, along with new production restrictions stemming form the pandemic, may cause inflation to surge more than expected.”

As tech was seen as a growth sector of the market with higher earnings in the long-term, it was discouraged. This is because money today will be more valuable than the money tomorrow.

Apple (NASDAQ), Facebook, Google-parent Alphabet and were all 2% below.

As a result, chip stocks pushed the broader technology sector deeper into red. The biggest losers were ASML (NASDAQ;), Applied Materials(NASDAQ:) as well as Teradyne.

The only sector that was green were energy, even though oil prices continued to gain despite investors continuing to believe rising energy demand and supply-chain problems will continue.

Consumer confidence was lower than expected due to the negative impact of the Delta variant on sentiment.

The Conference Board’s index fell unexpectedly to a reading of 109.3 from 115.2, missing economists estimates for 115.0.

Jefferies (NYSE 🙂 stated in a note that “just like what we’ve seen in sentiment data from the University of Michigan over the last two months, consumers feel the pain of disappointment due to the Delta variant of COVID.”

In other news, Ford Motor (NYSE:) unveiled plans to invest in a new assembly plant and three battery factories, in an effort to speed up its push into electric vehicles

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs include stocks, indexes and futures. Prices for Forex and CFDs are provided not by the exchanges. They are provided instead by market makers. Therefore prices can be inaccurate and differ from actual market prices. These prices should not be used as a trading tool. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.