Shreyashi and Bansari Kamdar

(Reuters] Wall Street’s principal indexes plunged Monday due to heavyweight technology stocks dropping on Monday. Expectations of a strong interest rate environment pushed U.S. Treasury yields higher than usual for two years and helped banks.

Megacap companies include Apple Inc (NASDAQ) and Amazon.com Inc. Microsoft Corp (NASDAQ:), Meta Platforms Inc, Tesla (NASDAQ) Inc all fell between 2.1% to 4.4% during early trading.

The consumer discretionary, technology and communication services sectors, housing major growth companies, fell the most among the 11 major S&P sectors.

After reaching a record, the index of value-oriented banks fell to its lowest level in over a decade.

The S&P 500 and the tech-heavy Nasdaq indexes were on course for their fifth straight day of declines as growth stocks tumbled in the first week of 2022 after investors began to recalibrate their portfolios to account for a more hawkish Federal Reserve.

Goldman Sachs (NYSE 🙂 anticipates that the Fed will raise rates by four times in 2022 compared with its earlier forecast of three and start the runoff process to improve its balance sheet as early as July.

Fears of the Fed are the main issue this morning, as they were last week. Goldman expects four rate rises in 2022. This is a highly hostile environment for tech stocks and growth stock,” Thomas Hayes from Great Hill Capital LLC, New York.

Tesla fell 2.3% following Elon Musk’s tweet on Friday, which stated that Tesla will increase the U.S. cost of advanced driver assistance software.

Microsoft dropped 2.7% following a report by media that Microsoft was losing its augmented reality talent to competitors like Meta Platforms.

Traders have ramped up their rate hike expectations this year after the U.S. central bank’s minutes from the December meeting suggested an earlier-than-expected rise in rates.

According to the market, there is a better than 70% chance that interest rates will rise to 0.25% in February and then increase by at least another two hikes before year-end. [FEDWATCH]

Early trading saw the benchmark reach 1.80%, a mark it has not seen since early 2020. The benchmark moved up 25 basis point last week, its highest level since late 2019

For clues about consumer and producer price trends, investors are awaiting inflation data this week to see if they can influence the Fed’s future interest rate increases.

10:00 a.m. ET, the was down 411.10 points, or 1.13%, at 35,820.56, the S&P 500 was down 71.67 points, or 1.53%, at 4,605.36, and the was down 326.10 points, or 2.18%, at 14,609.80.

The sportswear industry is a giant Nike The stock fell 4.1% following a downgrade by HSBC to “hold” and a peer Adidas (OTC) because of persistent supply chain problems.

For a ratio of 4.10 to 1 on the NYSE, and 4.44 to 1, on the Nasdaq, decliners outnumbered advances.

The S&P index recorded 35 new 52-week highs and four new lows, while the Nasdaq recorded 53 new highs and 467 new lows.