Wall Street tumbled with growing megacaps and tech stocks driving a sell-off in the market as concerns over rising rates sapped risk appetite.
Stocks faltered this week after the release of minutes from the U.S. Federal Reserve’s July meeting on Wednesday, as investors tried to get an accurate reading of the central bank’s monetary policy tightening trajectory.
The blue-chip Dow was on track to post small weekly gains, while the Nasdaq and S&P 500 were heading for their first weekly loss after four straight weeks of gains.
“A lot of not-so-good news here today and it’s just showing up as an overall market sell-off,” said Dennis Dick, retail trader at Triple D Trading, pointing to weak Deere & Co earnings, l inflation in Germany and a sale at the same time. stocks and cryptocurrencies.
“You’re getting a bit of profit taking (after) a pretty good run over the last six weeks.”
Deere fell 2.8% after missing its profit estimates as the world’s largest heavy equipment maker continues to deal with parts shortages stemming from supply chain issues.
The S&P 500 industrials sector fell 1%.
High-growth and tech stocks such as Amazon.com Inc and Alphabet Inc fell nearly 2% as US Treasury bond yields climbed, mimicking European bonds after Germany announced record increases monthly producer prices.
Banks also fell 1.3% and was on track to end the week down, potentially ending their six-game winning streak.
Meanwhile, Richmond Federal Reserve Chairman Thomas Barkin said on Friday that the US central bank’s efforts to control inflation could lead to a recession, but it need not be “calamitous”.
St Louis Fed President James Bullard said on Thursday he was inclined to back a third straight 75 basis point rate hike in September, while his San Francisco Fed colleague Mary Daly said a rate hike of 50 or 75 basis points next month would be “reasonable.” .
In early trading Friday, the Dow Jones Industrial Average was down 192.74 points, or 0.57%, at 33,806.30, the S&P 500 was down 38.75 points, or 0.90%, at 4,244.99, and the Nasdaq Composite was down 187.97 points, or 1.45%, at 12,777.37.
The Fed has raised its benchmark overnight interest rate by 225 basis points since March to combat high inflation for four decades.
Next week’s focus will be on Fed Chairman Jerome Powell’s speech on the economic outlook at the annual conference of world central bankers in Jackson Hole, Wyoming.
Cryptocurrency and blockchain-related stocks fell following a sudden selloff in bitcoin, with crypto exchange Coinbase Global and miner Marathon Digital down 8.5% and 11.5% , respectively.
Bed Bath & Beyond Inc plunged 41.1% when billionaire investor Ryan Cohen left the struggling home goods retailer by selling his stake.
General Motors Co rose 1.8% after announcing it would restore quarterly dividend payments.
Falling issues outnumbered advances for a 7.56-to-1 ratio on the NYSE and a 5.16-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 29 new lows, while the Nasdaq recorded 10 new highs and 35 new lows.