S&P 500 Slips as Rising U.S. Yields Dent Growth Stocks
2022.08.22 22:13
By Yasin Ebrahim
Investing.com — The S&P 500 slumped Monday, as growth sectors of the market including tech and consumer were under pressure from rising Treasury yields amid fears about Federal Reserve chairman Jerome Powell delivering a hawkish surprise later this week.
The S&P 500 fell 2.5%, the Dow Jones Industrial Average slipped 2.0%, or 676 points, the Nasdaq was down 2.6%.
Tech stocks struggled to shake off pressure from rising Treasury yields, the enemy of stocks that have high valuations, as investors await fresh clues on monetary policy from the Federal Reserve at the central bank’s annual Jackson Hole symposium later this week.
“[A] more hawkish tone is likely to set the stage for a more aggressive rate move next month, while a softer or more dovish tone will expectedly reinvigorate hopes of a lesser sized move,” Stifel said in a note.
Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META) were down more than 2%.
Netflix (NASDAQ:NFLX) fell more than 6% after CFRA downgraded the stock to sell from hold and cut its price target on the stock to $238 from $345 on worries that the streaming giant’s earnings will decline in the second half of the year.
Ford Motor (NYSE:F), meanwhile, dragged consumer stocks lower as the automaker was ordered to pay $1.7 billion to the family of Voncile and Melvin Hill, who were killed in a fatal rollover of a F-250 pickup truck. The automaker also said it would slash 3,000 jobs in the U.S. and Canada.
Energy was the relatively outperforming sector on the day, down about 0.5%, as oil prices recovered losses after Saudi energy minister touted the prospect of major oil producers cutting costs to ensure that oil futures price reflect the current supply and demand fundamentals.
APA (NASDAQ:APA), Coterra Energy (NYSE:CTRA) were the major gainers, while Occidental Petroleum (NYSE:OXY) declined more than 2% on reports that Warren Buffett’s Berkshire Hathaway (NYSE:BRKa) isn’t considering a takeover despite increasing his stake to 50% in the oil major.
In other news, meme-related stocks including GameStop (NYSE:GME), AMC Entertainment Holdings Inc (NYSE:AMC), and Bed Bath & Beyond Inc (NASDAQ:BBBY) were also under pressure, with the latter down more than 38% as the company’s new preferred share class begin trading.
