Nasdaq falls more than 2% as rising bond yields drag mega-cap tech names lower
- US stocks fell on Monday, dragged by losses among tech-heavyweights like Amazon and Facebook.
- Oil prices spiked after OPEC+ agreed to keep its existing schedule of gradual hikes in production.
- The yield on the benchmark 10-year Treasury note climbed to 1.484%.
US stocks tumbled on Monday dragged by tech-heavyweights like Facebook and Amazon amid rising Treasury yields.
The benchmark S&P 500 fell more than 1.5% - slipping below its 100-day moving average - while the tech-heavy
Here's where US indexes stood at the 4:00 p.m. ET close on Monday:
- S&P 500: 4,300.46, down 1.30%
- Dow Jones Industrial Average: 34,002.92, down 0.94% (323.54 points)
- Nasdaq Composite: 14,255.48, down 2.14%
These factors have pushed yields higher, with tech stocks in particular bearing the brunt.
"The Nasdaq is the punching bag as global bond yields rise and as many investors anticipate the cyclical rotation trade will become the playbook after the DC debt drama," Edward Moya, senior market analyst at foreign exchange Oanda, said in a Monday note.
Also looming is the continuation of the debt ceiling crisis that Congress is trying to avert later this month.
A default would erode trust in the dollar and cause interest rates to soar, which would lift mortgage, car loan, and credit card costs for borrowers. S&P said it would cut its rating to the worst-possible rank of D in the event of a single non-payment on government debt.
Despite this, many analysts, including LPL Financial, remain bullish for the fourth quarter - a period that has historically been best time of year for stocks. Beyond 2021, chief market strategist Ryan Detrick and equity strategist Jeff Buchbinder are also optimistic.
"We see a favorable economic environment for stocks in 2022, consistent with prior mid-cycle expansion years and bolstered by continued earnings growth," they said in a Monday note. "The gains may not come easy, however, with a number of risks."
Oil prices spiked after OPEC+ on Monday agreed to keep its existing schedule of gradual hikes in oil production, adding to inflationary pressures engulfing global markets.
Bank of America said last week that Brent crude could hit $100 a barrel for the first time since 2014.
Gold rose 0.17%, to $1,766.30 per ounce.
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