(Reuters) – Wall Street ended sharply lower on Monday as investors ditched Big Tech and other growth stocks amid rising Treasury yields, as concerns over a possible U.S. government default have also fueled caution.
Apple, Microsoft, Amazon and Alphabet, the four most valuable companies in the US stock market, each lost more than 2%.
Facebook, the fifth most valued company, fell nearly 5% after its Instagram photo-sharing app and platform went down for thousands of users, according to outage tracking website Downdetector .com.
“For Big Tech, this is a short to medium term thing, which is part of a remediation process. Rates were clearly too low, in large part because of central bank policies, and now that investors expect those policies to be clawed back, rates are approaching their true value, ”said Jack Ablin, director of investments at Cresset Wealth Advisors in Palm Beach. , Florida.
U.S. Treasury yields rose as investors worried about the absence of a debt ceiling in the U.S. Congress and eagerly awaited the release of jobs data this week, which could pave the way for reducing Federal Reserve asset purchases.
President Joe Biden has said he cannot guarantee the government will not exceed its $ 28.4 trillion debt limit unless Republicans join Democrats in voting to increase it, as the States- United faces the risk of a historic default in just two weeks.
Recent data showing an increase in consumer spending, an acceleration in factory activity and high inflation growth has fueled bets that the Federal Reserve could start tightening its accommodative monetary policy sooner than expected. [US/]
Major Wall Street indexes were battered in September, hit by concerns including the fate of a huge infrastructure spending bill and the collapse of the heavily indebted China Evergrande group.
The S&P 500 and Nasdaq closes were at their lowest since July.
The S&P 500 has now fallen about 5% from its closing high on September 2.
However, more than half of S&P 500 stocks are down 10% or more from their 52-week highs, with 71 stocks down more than 20%.
Further scaring investors, St. Louis Federal Reserve Chairman James Bullard has warned that inflation could remain high for some time.
Some pockets of the market rebounded, with the S&P 500 Energy and Utilities indices both recovering.
Shares of Merck & Co climbed 2.1%. Merck shares also rose on Friday after learning that the company was developing the first oral antiviral drug for COVID-19.
Tesla Inc rose 0.8% after the electric vehicle maker announced record quarterly deliveries to exceed estimates.
The Dow Jones Industrial Average fell 0.94% to close at 34,002.92 points, while the S&P 500 lost 1.30% to 4,300.46.
The Nasdaq Composite fell 2.14% to 14,255.49.
US trade negotiator Katherine Tai has pledged to start canceling some tariffs imposed by former President Donald Trump on goods from China, while pressuring Beijing in “frank” talks in the coming days on its failure to deliver on promises made in the Trump trade deal and end harmful industrial policies. .
Volume on the US stock exchanges was 11.1 billion shares, compared to an average of 10.8 billion over the last 20 trading days.
Falling issues outnumbered advancing ones on the NYSE by a ratio of 1.92 to 1; on the Nasdaq, a ratio of 2.62 to 1 favored the declines.
The S&P 500 posted 21 new 52 week highs and 7 new lows; the Nasdaq Composite recorded 70 new highs and 215 new lows.
Reporting by Noel Randewich in Oakland, California; Additional reporting by Shreyashi Sanyal and Devik Jain in Bangalore; Editing by Maju Samuel and David Gregorio