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NEW YORK – Wall Street stocks suffered another ugly rout yesterday as US bond yields resumed their upward climb on a bruising day for shares of Apple and other tech giants.
Yesterday’s economic reports included data showing a drop in weekly US jobless claims that point to a strong labor market likely to keep the Federal Reserve focused on its current policy of countering inflation.
“Risky assets don’t stand a chance of a meaningful rally if the economy continues to show resilience while inflation continues to be significantly above the Fed’s Funds rate,” said Oanda’s Edward Moya.
The broad-based S&P 500 dropped 2.1% to 3,640.47, its lowest close since November 2020.
The Dow Jones Industrial Average lost 1.5% at 29,225.61, while the tech-rich Nasdaq Composite Index tumbled 2.8% to 10,737.51.
FHN Financial’s Chris Low said investors were also unnerved by market volatility in Britain after Prime Minister Liz Truss doubled down on a controversial tax cut policy that has rattled markets.
Investors fear a “contagion” beyond Britain in response to the policy proposal, Low said, noting the Truss plan contradicts the efforts of central banks to counter inflation and has been criticized by the International Monetary Fund.
Shares of large technology companies were under pressure after a downgrade of Apple by Bank of America based on expectations of slower growth.
Apple dropped nearly 5% and Facebook parent Meta lost 3.7% while Tesla sank 6.8%. – AFP, September 30, 2022