US stocks trade lower as bond yields rise after renomination of Powell as Fed chair
- US stocks traded mixed Tuesday as bond yields rose after the renomination of Jerome Powell as Fed Chair.
- Equities were also looking to new economic data and retail and technology earnings later this week.
US stocks traded mixed as bond yields rose after President Joe Biden nominated Jerome Powell for a second term as chairman of the Federal Reserve on Monday.
The benchmark S&P 500 slipped after closing down 0.3% in the previous session. The tech-heavy Nasdaq-100 also edged lower, dragged by shares such as Zoom after the video teleconferencing firm announced an expected revenue slowdown as the pandemic eases. Tech shares are also more sensitive to higher interest rates than others.
Here's where US indexes stood at the 9:30 a.m. ET open on Tuesday:
- S&P 500: 4,673.06, down 0.21%
- Dow Jones Industrial Average: 35,604.76, down 0.04% (14.49 points)
- Nasdaq Composite: 15,787.72, down 0.41%
Bond yields, which move inversely to prices, continued to rise on Tuesday, with the key 10-year Treasury note yield up marginally to 1.648%, well above a recent low of 1.418% touched in earlier in November on expectations the Fed will hike interest rates as soon as June 2022.
"The market is reading it a certain way," Peter van Dooijeweert, a managing director at the investment company Man Group, told Insider Tuesday. "They are expecting him to be more hawkish and that rate rises will come earlier."
Powell first became Fed chair in February 2018 and his current term was set to expire in February 2022. Investors were unsure if Biden would renominate Powell, or choose a more progressive candidate like Fed governor Lael Brainard.
In cryptocurrencies, bitcoin is up 1.21% Tuesday to $56,961, but roughly 16% lower from its record high of above $68,600 on November 10.
Gold fell as much as 1.18% to $1,787.68 per ounce.
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