Wall Street closes with severe losses
The New York Stock Exchange closed with a severe pullback on Tuesday. Wall Street is on its way to its worst month in a year, weighed down by rising bond interest rates.
The Dow Jones slipped by 1.63% or 569.38 points, to 34,299.99. Meanwhile, S&P 500 fell 2.04%, or 90.48 points, to 4,352.63. The Nasdaq lost 2.83% or 423.29 points, standing at 14,546.68.
Allianz Investment Management stated that the liquidation caused by the interest rates is a reminder of the impact of the Fed’s monetary stimulus. Meanwhile, the Central Bank has signaled a rapid reduction in its support measures.
The Fed has been buying treasury bills and other securities worth $120 billion a month since the start of the pandemic crisis. At its monetary meeting last week, the central bank hinted that it would start tapering soon.
The New York stock market started the session with doubts. It decided firmly on sales after Powell admitted to the Senate Banking Committee that inflation in the US is more worrying and structural than at the beginning of this year. The central bank’s president also mentioned that supply chain problems were one of the main reasons for high inflation.
Meanwhile, in the public debt market, the yield on the 10-year Treasury bond pushed to levels not seen since June.
Tech stocks led the decline
When looking over each sector, the technology companies’ drop became highlighted. The sector lost 2.99%. Meanwhile, the communications sector also slipped by 2.79%.
Facebook fell by 3.66% to $340.65, Amazon dipped by 2.64% to $3,315.96, and Alphabet yielded 3.76% to $2,723.68.
The only sector that remained in the green territory was energy, advancing by 0.44%. Meanwhile, a crisis looms due to the tight global oil supply and increased demand for fuels.
Microsoft was the most affected among the 30 companies listed on the Dow Jones, plunging by 3.62%. Salesforce followed it with a loss of 2.69%. Goldman Sachs lost 2.60%. The only gainers were Chevron, adding 0.41%, and Caterpillar advanced by 0.33%.
