Tech stocks continue sharp slump as economic-recovery prospects stoke inflation fears
- US stocks declined on Tuesday as expectations for rising inflation dragged on tech mega-caps.
- Investors rotated further to value stocks and small caps from growth names as stimulus optimism fueled bets on economic recovery.
- Bitcoin tanked below $49,000 after trading as high as $55,053.91 Monday afternoon as investors snapped up crypto profits.
- Sign up here for our daily newsletter, 10 Things Before the Opening Bell.
US equities broadly fell on Tuesday as positioning for strong economic growth and a pickup in inflation weighed on the tech sector.
Growth favorites faced fresh pressure after the open as investors bet on Biden-backed stimulus to supercharge the US recovery. The increasing likelihood of a stimulus boost has revived concerns of near-term inflation as fiscal support lifts consumer spending. Value stocks and small caps historically outperform momentum names as inflation rises.Tech mega-caps that fueled the market's first bounce from pandemic lows saw the most intense selling. The
- S&P 500: 3,852.18, down 0.63%
- Dow Jones industrial average: 31,473.82, down 0.15% (47.87 points)
- Nasdaq composite: 13,262.78, down 2.06%
The tech-led decline mirrors the drop seen to start the week. Stocks closed mixed on Monday as inflation concerns pulled cash out of large-cap names and into reopening bets. The
Federal Reserve Chair Jerome Powell is expected to ease fears of overwhelming inflation when he testifies to the Senate Banking Committee at 10 a.m. ET. Central bank officials have signaled in recent weeks that, though stimulus may lift inflation soon after its passage, the increase will likely be temporary.Tesla sank for a second straight day to its lowest level since December. Monday's losses saw more than $64 billion erased from the automaker's market cap and led CEO Elon Musk to lose his title as the world's wealthiest person. Bitcoin plummeted as investors took profits from the cryptocurrency's latest run-up. The token hovered just below $49,000 after trading as high as $55,053.91 Monday afternoon. To be sure, prices are still up more than 60% year-to-date.
Spot gold dipped as much as 0.3%, to $1,803.73 per ounce, at intraday lows before erasing most losses. The US dollar strengthened slightly against a basket of Group-of-20 currencies. Treasury yields edged higher as investors dumped the safe havens.
- Bihar has no governance, state budget a bundle of lies : Tejashwi in assembly
- Haryana to table anti-conversion bill in upcoming budget session: Minister
- Bihar saw 8-fold growth in budget size during both RJD and NDA regimes : Tejashwi
- MVA govt trying to curtail budget session citing pandemic: BJP
- Gangubai Kathiawadi: An inspiring journey of a brothel head and a political leader of Kamathipura