Operators of the New York Stock Exchange (GETTY IMAGES NORTH AMERICA/SPENCER PLATT)
The New York Stock Exchange withdrew Monday as bond yields escalated, fearing US inflation ahead of March.
According to the final results at the close, the Nasdaq, with a strong technological color, pulled down 2.18% to 13,411.96 points. The Dow Jones index lost 1.19% to 34,308.08 points and the S&P 500 lost 1.69% to 4,412.53 points.
“The stock market has retreated after another rise in government bond yields amid prospects of aggressive monetary policy tightening,” Wells Fargo analysts noted, adding that the war in Ukraine and China’s lockdowns against the Covid -19 “the economic outlook also darkened”.
US inflation for March, due Tuesday, is expected to be “extremely high,” White House spokeswoman Jen Psaki warned Monday.
Many economists predict an 8.5% year-on-year increase in the consumer price index (CPI) in March, the highest level since 1981, when inflation reached a 40-year high of 7.9% in February.
“Rising bond yields are a continuation of all the concerns that we’ve been talking about for weeks, inflation, inflation, inflation,” LBBW’s Karl Haeling told AFP.
10-year US Treasury yields rose to 2.78% from 2.70% at last close. This is their highest level since January 2019.
The analyst also pointed out that the US Treasury issued three bonds this week (on three, 10 and 30 years), which put pressure on bond prices and boosted their yields.
This tension in the bond market was “the biggest factor that hurt the stock market as we saw the Nasdaq lead the decline,” Haeling said.
On the Nasdaq, so-called growth stocks, which are very sensitive to inflation and interest, have collapsed.
Tesla lost 4.83% to $975.93, Google (Alphabet) lost more than 3%, Meta (Facebook) Amazon and Apple all lost more than 2%.
On the semiconductor side, Nvidia fell 5.20% to $219.17.
But the decline was largely shared by the 11 sectors of the S&P 500, starting with energy (-3.11%), weighed down by the decline in crude prices.
The price of black gold has fallen below $100 in barrels amid concerns over Chinese demand.
Exxon Mobil lost 3.44% to $83.85, Chevron lost 2.57% to $165.56 and Occidental Petroleum 6.28% to $97.98.
In China, where inflation soared last month, a resurgence of Covid-19 has locked several regions.
Shanghai, the economic capital of the country, has been in full or partial confinement for two weeks, with the 25 million Shanghainese forced to stay at home.
“There are also more and more downward revisions to the US economic forecast,” says Karl Haeling. “Some economists say the chances of a recession are increasing.”
Adding to these economic considerations was a technical factor that increases volatility: “with the Easter holidays and markets closed for Good Friday, less trade will be needed to move the markets,” the LBBW analyst said.
Shares of Texas-based computer security group SailPoint rose 29.16% to $64.05 when the company announced Monday an agreement with private equity firm Thoma Bravo to be acquired for $6.9 billion dollars.
After a week of adventures between Tesla boss Elon Musk and the social network Twitter, the platform’s title gained 1.69% to $47.01.
The erratic billionaire has given up sitting on Twitter’s board of directors.
The richest man in the world announced in early April that he had taken a 9.2% stake in the capital of Twitter, making him the largest shareholder.
Nasdaq
