The floor of the New York Stock Exchange is occupied by traders on March 20, 2020.
Photo by Spencer Platt.
The US stock market fell on Tuesday as investors worried about the Federal Reserve's schedule for tightening monetary policy.
The tech-laden Nasdaq 100 was down nearly 3%, dragged by mega-cap giants from Meta (formerly Facebook) toTesla. The S&P 500 fell to its lowest this year, with 10 out of 11 industry groups closing in the red.
The yield on the 10-year Treasury rose to its highest level in more than a year. Bond yields move with prices.
The US indexes stood after 4:00 pm. The close is Tuesday.
The stock markets were roiled in early 2022, due to the expectation that the Fed will start to reduce its balance sheet, which will end the central bank's support of the US economy. Tech stocks, which have largely benefited from a low-interest-rate environment, are starting to feel the pressure.
"The Fed has engineered a massive hawkish pivot, which has contributed to an increase in volatility recently," Jeff Buchbinder, equity strategist at LPL Financial, said in a Tuesday note. He said this turbulence is normal.
After the first rate hike of a cycle, stocks have historically performed well, with significant upside before the bull market tops. Even with rate hikes coming soon, we think this economic cycle and bull market have a long way to go.
The S&P 500 could see a further 10% decline if it breaks below 4,546, a key support level that it is fast approaching, according to Fairlead Strategies. The benchmark needs to hold this important support.
Microsoft agreed to acquire a company for 69 billion dollars. Microsoft's shares fell 2% while shares of Activision soared as much as 38%.
Video-game stocks joined the rally. Both Electronic Arts and U.S. based company surged by more than 7%. Take-Two tacked on 5% after reaching a deal last week to buy Zynga.
Goldman fell as much as 9% after missing estimates for its fourth-quarter earnings report. The earnings season began last Friday.
As the risk-off sentiment hurting tech stocks weighs on thecryptocurrencies, it extended its losses to continue trading below $42,000. The second-largest digital asset was also trading lower.
The death of an oil tanker in the Middle East caused oil prices to surpass their highest levels in more than three years.
The price of West Texas Intermediate crude oil rose as much as 2.5%. The price of oil's international benchmark jumped as much as 1.73%.
The price of gold was $1,814.27 per ounce.
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