NEW YORK, May 11 — Wall Street’s main indexes fell today, led by tech-related stocks, as investors feared that rising inflation could push the Federal Reserve to tighten monetary policy faster than expected.
The outperformers of 2020, Apple, Amazon.com Inc, Microsoft Corp, Google-parent Alphabet Inc and Tesla Inc fell between 0.8 per cent and 2.4 per cent, weighed the most on the S&P 500.
The 10-member NYSE FANG+TM index, which includes the FAANG group of stocks alongside Tesla, Alibaba, and Twitter Inc, declined 1 per cent, extending the index’s market cap loss of more than US$442 billion (RM2.8 trillion) so far this month.
The yield on benchmark US 10-year Treasury note ticked up to session high of 1.629 per cent ahead of consumer price index report tomorrow.
Investors have grown wary of fast price rises even though the central bank has repeatedly said it views any inflation that occurs to be transitory.
“We’ve seen a spike in commodity prices, economic data has been very strong and an uptick in rates has really pressured the technology complex,” said Dan Eye, head of asset allocation and equity research, Fort Pitt Capital Group.
“If you’re valuing a high-growth company based on its earnings ten years out, those earnings into the future are worth a lot less today at higher inflation levels.”
In a late session reversal yesterday, inflation jitters drove investors away from growth stocks to cyclicals, which benefit the most as the economy reopens, resulting in the S&P 500 logging its worst day in nearly eight weeks.
All major S&P sectors were in the red, with the energy index shedding 1.8 per cent, the most due to weaker oil prices.
At 10am ET, the Dow Jones Industrial Average fell 259.99 points, or 0.75 per cent, to 34,482.83, the S&P 500 lost 30.14 points, or 0.72 per cent, to 4,158.74 and the Nasdaq Composite lost 88.84 points, or 0.66 per cent, to 13,313.02.
Simon Property Group Inc fell 3.3 per cent after the US mall operator said it does not expect a return to 2019 occupancy levels until next year or 2023, as it looks to play hardball in rent negotiations with tenants.
L Brands Inc fell 3 per cent after the company said it plans to split itself into two publicly traded companies, Bath & Body Works and Victoria’s Secret, after the retailer decided against a sale of the lingerie brand.
Declining issues outnumbered advancers by a 3.9-to-1 ratio on the NYSE and by a 2.5-to-1 ratio on the Nasdaq.
The S&P 500 posted three new 52-week highs and one new low, while the Nasdaq recorded 16 new highs and 203 new lows. — Reuters
