Wall St tumbles on weak consumer sentiment and rising bond yields
- Names of tech mega-caps drag S&P 500 and Nasdaq down
- Ford increases $ 11.4 billion investment with SK Innovation
- Indices decline: Dow 1.48%, S&P 1.98%, Nasdaq 2.73%
September 28 (Reuters) – The S&P 500 and the Nasdaq headed for their worst day in four months on Tuesday as consumer confidence data deepened concerns over slowing economic growth, while yields increased the Treasury hit mega-cap tech stocks.
As of 11:53 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 516.54 points, or 1.48%, to 34,352.83.
The S&P 500 (.SPX) was down 88.15 points, or 1.98%, to 4,354.96, and the Nasdaq Composite (.IXIC) was down 408.64 points, or 2.73% , at 14,561.33, both registering their worst day since early May.
U.S. consumer confidence this month unexpectedly fell to its lowest level since February, as the surge in COVID-19 infections heightened concerns about the economy’s near-term outlook. Read more
The reading, coupled with a growing trade deficit and an expected drop in vehicle sales, has raised further concerns about the state of consumption in the country, which is a key driver of economic growth. Read more
“It seems like all of these headwinds are hitting at the same time – a potential tax hike, higher inflation, uncertainty over the Delta variant, earnings and higher interest rates… are weighing heavily on the indices,” said Ken Mahoney, Managing Director. Mahoney asset management.
“Now, with the 10 years warming up, that has scared investors (because) if returns go up there will be more competition for stocks that investors really haven’t had to deal with in the past two years. last years. “
The progress of the U.S. government funding negotiations was also in the spotlight, with Democrats working to prevent a government shutdown and a potentially economically crippling U.S. credit default, while trying to sidestep the issue. hear about a set of gigantic taxes and expenses. Read more
Concerns about a halt, coupled with weak seasonal trends this month, put the S&P 500 on track for its worst monthly drop since October of last year.
Treasury yields surged as investors anticipated higher inflation in 2021, as well as a possible interest rate hike by the Federal Reserve next year.
Shares of Apple (AAPL.O), Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O) and parent company Google Alphabet Inc (GOOGL.O) fell 2, 9% to 4%.
These stocks have benefited from the low interest rate environment since the start of the pandemic.
The Russell 1000 Growth Index (.RLG) was set for its worst day since February.
Ten of the top 11 S&P sectors fell, with energy (.SPNY) the only winner.
Federal Reserve Chairman Jerome Powell said the US economy was still far from peaking in jobs during a hearing before the US Senate Banking Committee, while expressing his concerns about the protracted difficulties in a post-COVID economic reopening. Read more
Among other actions, Ford Motor Co (FN) rose 1.3% after the US automaker and its Korean battery partner SK Innovation (096770.KS) announced they would invest $ 11.4 billion to build an electric F-150 assembly plant and three battery plants in the United States. Read more
Falling issues outnumbered advances for a 5.13-to-1 ratio on the NYSE and a 4.57-to-1 ratio on the Nasdaq.
The S&P Index recorded 17 new 52-week highs and five new lows, while the Nasdaq recorded 39 new highs and 90 new lows.
Reporting by Sruthi Shankar, Medha Singh and Devik Jain in Bengaluru; Editing by Subhranshu Sahu, Sriraj Kalluvila and Maju Samuel
Our standards: Thomson Reuters Trust Principles.