17.9 C
New York
Tuesday, June 6, 2023

Wall Street Opens Lower on Inflation Fears; Nasdaq Down 1.4%

Wall Street Opens Lower on Inflation Fears; Nasdaq Down 1.4%
© Reuters.

By Geoffrey Smith 

Investing.com — U.S. stock markets fell at the opening on Tuesday as fears of inflation continued to push up bond yields, pressuring valuations that have been supported since the start of the pandemic by extraordinary stimulus measures.

By 9:45 AM ET (1345 GMT), the Nasdaq Composite was down 1.4%, near its lowest level in a month, while the S&P 500 was down 0.8% and the Dow Jones Industrial Average was down 100 points, a relatively modest 0.3%. 

As on Monday, the Dow’s outperformance was due largely to strength in banking, energy and other ‘value’ stocks, whose stronger near-term cash flow leaves them better able to cope with rising interest rates.  The 10-Year Treasury yield rose to a new three-month high of 1.56% before retreating a little to 1.54%.

The market was unsettled by the pre-release of Federal Reserve Chairman Jerome Powell’s testimony to Congress, due at 10:00 AM ET, which acknowledged that inflation inflation had been stronger than expected and is likely to remain “elevated” for at least some months.

While inflation during the economic rebound this year has been tied to certain sectors, rather than a broadly based rise in prices, it has grown increasingly acute in the last few months, with further evidence of the phenomenon Tuesday in national house prices, which rose 19.2% on the year through August. 

There were conspicuous drops in some of the heavyweight tech names that have been responsible for much of the broader market gains this year. Microsoft (NASDAQ:MSFT)t stock and Amazon (NASDAQ:AMZN) stock both fell 2.0%, while  Alphabet (NASDAQ:GOOGL) stock fell 2.6% and Facebook (NASDAQ:FB) stock fell 2.7%, as investors booked profits to focus on stocks with less challenging valuations. 

Vaccine makers were among the biggest fallers in early trading, amid optimism that the worst of the pandemic is now at least behind the U.S., if not the rest of the world. New infections have fallen by over half since their peak earlier this month, with deaths also seemingly past their peak. Moderna (NASDAQ:MRNA) stock fell 5.8% while Novavax (NASDAQ:NVAX) stock fell 7.1%, Studies showing that Moderna’s vaccine may protect people against Covid-19 for longer than rival Pfizer (NYSE:PFE)’s have worked against the stock in the last couple of days, suggesting that there may be less need for health authorities to buy booster shots from the company.

Energy stocks were broadly supported by the continued rise in natural gas prices, even though crude oil prices fell back after the global benchmark Brent touched a three-year high of over $80 a barrel overnight. Exxon Mobil (NYSE:XOM) stock rose 0.8% while Chevron (NYSE:CVX) stock rose 0.5%. Amid smaller names, Camber Energy (NYSE:CEI) stood out with a 15% rise, as retail traders piled in on a characteristic squeeze of a stock thought to be heavily shorted.

Source: Investing.com

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles