Tech leads stock losses as Treasury yields climb
BNN Bloomberg
Stocks and bonds retreated Monday as investors focused on inflation and the impact of policy tightening by central banks.
Stocks and bonds retreated Monday as investors focused on inflation and the impact of policy tightening by central banks.
Tech companies led losses in the S&P 500, while the Nasdaq 100 underperformed major benchmarks. Ten-year Treasury yields climbed through 2.75 per cent for the first time since March 2019 after the Federal Reserve last week signaled sharp rate hikes and balance-sheet reduction to curb price pressures. Oil resumed its decline as China’s largest coronavirus outbreak in two years heightens concerns about demand from the world’s biggest crude importer.
Market sentiment continues to be shaped by a hawkish Fed, commodity disruptions caused by Russia’s invasion of Ukraine and the prospect of an economic slowdown. China’s COVID-19 outbreak continues to spread despite an extended lockdown of Shanghai’s 25 million people, with the restrictions straining global supply chains. Investors are awaiting earnings reports this month to restore confidence in the outlook for equities.
“Inflation, monetary policy jitters, Shanghai shutdown, and Russian invasion of Ukraine hold markets hostage,” wrote John Stoltzfus, chief investment strategist at Oppenheimer. “Markets remain prone to rotation and rebalancing for now as multiplicities of uncertain outcomes cause volatility and no shortage of pondering and projection.”
The credit derivatives market ruled Russian Railways JSC to be in default after missing an interest payment last month. Russia said it would halt bond sales for the rest of the year and take legal action if sanctions force it into a sovereign default.
