Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious Outperformance
Find Stocks Now

Nasdaq Slumps as 'Stretched' Valuation Fears, Rising Rates Grip Big Tech

Published 03/03/2021, 04:06 PM
Updated 03/03/2021, 04:29 PM
© Reuters.

By Yasin Ebrahim

Investing.com – The Nasdaq fell Wednesday, as concerns over "stretched" valuations in big tech were exacerbated by a renewed climb in U.S. interest rates even as data pointed to a wobble in the labor market.  

The Nasdaq Composite fell 2.70%. The Dow Jones Industrial Average slipped 1.30%, or 121 points. The S&P 500 fell 0.68%, and the 

A sea of red hit tech as investors continued to move out of higher-priced growth names that are less attractive in periods of rising rates and inflation during which a dollar today is more worth more than a dollar in the future.

Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), and Alphabet (NASDAQ:GOOGL) ended more than 2% lower, while Facebook (NASDAQ:FB) was down more than 1%.

 
The economy has not recovered to pre-pandemic levels, but markets have continued to surge well above 2020 levels, leading to somewhat stretched valuations.   
 
"We're expecting to get back to 2020 numbers in terms of the economy and earnings, sometime later this year, so I would say we're stretched, but that doesn't mean we can't continue [the upward trend]," Sean O'Hara, president of Pacer ETFs, said in an interview with Investing.com on Wednesday. "I think you're starting to see some cracks in that based on the NASDAQ the last couple of days or last week."  
 
While tech is having a tough time finding its footing. cyclicals continue to shine.
 
Energy was up more than 1% on rising oil prices as investors shrugged off a record weekly jump in U.S. weekly crude stocks, attributing the build to lower inventories used to produce products like gasoline following the cold snap that wreaked havoc in oil-rich Texas.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Diamondback Energy (NASDAQ:FANG), Hess (NYSE:HES) were up more 4%, while HollyFrontier Corporation (NYSE:HFC) soared 6% 

Financials also contributed to the rally, lifted by a jump in U.S. rates and bets a faster rollout of vaccines will support a sooner and stronger than expected reopening. President Joe Biden said Tuesday the U.S. will have enough vaccines for all adults by the end of May, two months sooner than initially expected. 

In Texas Governor Greg Abbott ended the mask mandate and said all business can reopen in the state.

Hewlett Packard Enterprise Co (NYSE:HPE), meanwhile, was unchanged despite reporting quarterly results that beat analysts' expectations on both the top and bottom lines, underpinned by the increasing number of companies making the shift to digital. 

Box (NYSE:BOX) was flat as its fourth-quarter results topped Wall Street estimates and the online storage company guided first quarter revenue to top $200 million for the first time.

In merger and acquisitions news, Las Vegas Sands (NYSE:LVS) said it would sell its Las Vegas properties to private-equity firms Apollo Global and VICI Properties (NYSE:VICI) for $6.25 billion. Las Vegas Sands was up about 3%

In other news, LYFT Inc (NASDAQ:LYFT) jumped more than 8% after company upgraded its outlook on a better-than-expected recovery in ridesharing demand.

Latest comments

Fed won’t raise interest rate this decade
que chido que puedas ganar desde tu celular
Exciting market condition. 😍
Who needs treasury at 1.5%?It’s more likely if inflation breaks loose, then the Fed will be forced to raise rates. That will be Negative for all these overvalued stocks, I guess the sell-off just started.
I am extremely indebted to my father for being able to repeat: pricey stocks hit by fears of rising rates and wobble in hiring.
lol, a 10 yr bond will get you 1.5 % and will lose value as interest % increase or you can have say apple and have dividend and appreciation - who writes this stuff
"Somewhat stretched"... What a gentle way of saying it's a massive bubble ready to burst.
when your sink is leaking just keep stuffing more towels under it. problem solved
JSE will be a great addition to your family
Watch jse stock you can not predict telsa is ******but proudly za born
MVIS buy the dip And see the raise later
all well Good Im miss
I hate Bidens world...you can feel the lack of confidence, open borders, anti police, ****of innocent babies, the worst PC correctness of all time, anti buisness, expensive gas, hipocracy, gross government spending and huge tax increase’s coming! Not to mention the hatred of the white race, raceism beyond belief. Anti women with men competing in their sports and the list goes on and on!
It's leftism in a nutshell.
you guys are plainly nuts. you cant be helped anymore.
here's a tissue for your issue. lol
LORD POWELL will save the day tomorrow. fed doesn't give care about anything but pumping stocks
He better be able to pump good.
It's not stocks they need to pump. With the yield on the US 10 yr approaching the dividend yield on the SPDR S&P 500, that's the danger.
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.