Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Nasdaq Turns Negative for Year on Tech Tantrum as Powell Fuels Rate Spike

Stock MarketsMar 04, 2021 04:04PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Yasin Ebrahim

Investing.com - The Nasdaq tumbled for a second-day in a row Thursday, erasing its gains for the year as U.S. rates resumed their sharp acceleration after Federal Reserve Powell offered no clues on ramping-up bond purchases and shrugged off investor fears about rising inflation.      

The Nasdaq Composite fell 2.1%, the Dow Jones Industrial Average fell 1.3%, or 335 points, but had been down by more than 700 points intraday. The S&P 500 fell 1.28%. 

Powell said the central bank would continue the current pace of bond buying despite the sharp jump in U.S. rates as inflation is unlikely to spiral out of control.  The U.S. United States 10-Year Treasury jumped above 1.5%, while the United States 30-Year rose to a more than one-year high. 

 

The Fed chief's reluctance to sway from the central bank's ongoing narrative that current monetary policy measures remain appropriate -- against the backdrop of investor concerns about rising inflation and a disorderly rise in rates -- exacerbated investor uncertainty. That sparked a wave of volatility, adding fuel to the tech-led sell off.

Higher-priced growth names were in the red, including Peloton Interactive (NASDAQ:PTON), DocuSign  (NASDAQ:DOCU), Square (NYSE:SQ) and Tesla (NASDAQ:TSLA), which traded lower. Semiconductor stocks, already feeling the heat from the chip shortage that has forced semis to rein in production, played a role in the broader sector retreat.

Some have pointed to the Fed's expansionary policy measures and the government's issuance of debt to fund multi-trillion-dollar Covid relief programs that has flooded the market with more bonds than buyers, pushing bond prices lower and yields higher.

"What happened with rates is pretty simple: supply and demand. We've printed so much money and issued so much debt that finding buyers for that debt is more challenging perhaps than maybe people thought,"  Sean O'Hara, president of Pacer ETFs, said in a recent interview with Investing.com.

But a prolonged rise in rates is unlikely as the Fed will step up bond purchasing, while another round of stimulus will provide states with fresh capital that will likely find its way into the bond market.

"I think the Fed will act and, perhaps be a little more aggressive on their bond buying, O'Hara added. If the $1.9 trillion stimulus package passes, a lot of the money is "going to be transferred from the federal government to state governments, [who in turn] are likely to buy bonds," helping to stem the supply-demand imbalance.

Semiconductor stocks, which have been one the best performing sectors over the past year, were also down, led by Micron Technology (NASDAQ:MU) as the chip shortage, which has forced semis to rein in production, compounded selling the sector.  Marvell (NASDAQ:MRVL) slumped 12% after its warning that the drought in chips would hamper its output this year off-setting in-line first-quarter earnings.   

Beyond tech, energy bucked the trend, rising 1%, on a sharp jump in oil prices after OPEC and its allies agreed to keep production steady through April. Saudi Arabia, which was pushing against calls to increase global supply, said it would extend its one million barrels per day voluntary production cut into April to allow Russia and Kazakhstan to increase production.

The rally in oil prices has been touted as harbinger of further doom in equities amid growing inflation fears.  "Further strength in crude oil prices ( > $65-66) could spark escalated de-risking in equities- against a combination of inflation fears and rising geopolitical tensions overseas," Janney Montgomery Scott said in a note. 

In other news, used car retailer Vroom (NASDAQ:VRM) slumped 28% to a 52-week low after it reported a wider-than-expected Q4 loss. 

Nasdaq Turns Negative for Year on Tech Tantrum as Powell Fuels Rate Spike
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (30)
Viking Fire
Viking Fire Mar 05, 2021 3:19AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Institutional greed looking for political targets as they raid the coffers. Thats all this is: taking profit at the highs.
Raymond Pasillas
Raymond Pasillas Mar 04, 2021 9:01PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The end is near with this socialism
Raymond Pasillas
Raymond Pasillas Mar 04, 2021 9:00PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Venezuela is here.
Mitchel Pioneer
Mitchel Pioneer Mar 04, 2021 8:42PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Charles Ponzi would have tears in his eyes if he could see the ultimate incarnation of his work, the US stock market.
Viking Fire
Viking Fire Mar 04, 2021 8:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Businesses and corporations today have record profits, as do institutions. A ceo can feed their family for 10000 years. Stop acting like your lives are over.
Ronald Warren
Ronald Warren Mar 04, 2021 8:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
How do the 750,000 and their families that lost their income last week feed themselves for 10,000 years?
Viking Fire
Viking Fire Mar 04, 2021 8:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ronald Warren maybe not have a system where ceos actually have to trickle down all those tax subsidies and savings they are given that were meant to trickle down
Amit Patel
Amit Patel Mar 04, 2021 8:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No, trickle down economics works. Give the ceo millions while the poor consumers $1
Viking Fire
Viking Fire Mar 04, 2021 8:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Everyone must be too young to remember the market does fine even during moderate inflation, people still make money lol
Davis Davis
Davis Davis Mar 04, 2021 7:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Powell needs to retire !!!
Davis Davis
Davis Davis Mar 04, 2021 7:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
totally unacceptable
bb blast
bb blast Mar 04, 2021 7:37PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
today is it's low. up from here.
Irvin Mermelstein
Irvin Mermelstein Mar 04, 2021 7:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
If you're long and not looking to hedge, and at least stay even, you ought to be.
Irvin Mermelstein
Irvin Mermelstein Mar 04, 2021 7:22PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I'm 60% short and 40% cash
stanley shalala
stanley shalala Mar 04, 2021 7:18PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I don't want to see the old faces of Powell or Yellen. They take the salary from people and give shXt to us. They always do nothing except helping the rich.
Options Trader
Options Trader Mar 04, 2021 7:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Recession is eminent. Electing politicians with no business experience has never made sense to me. liberals have one game plan, print money, tax the rich, and virtue signaling. it's quite boring.
Daniel Lu
Daniel Lu Mar 04, 2021 6:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Buy the dip or buy the green back
New Jazenevd
New Jazenevd Mar 04, 2021 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
In any case, market turbulence is good for good investors. It creates buying opportunities. Some folks can use it for own advantage.
taylor jason
taylor jason Mar 04, 2021 6:06PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
100%
Bulent Ok
Bulent Ok Mar 04, 2021 5:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What is actualy a correction? It basically means squeezing, stealing certain percentage of people's money.... And they do this every year avarage correction 20% those who make peanuts in the cycle might think they are actually making money.. But they are not... Because what you made will evaporate via taxation and inflation channel
Bulent Ok
Bulent Ok Mar 04, 2021 5:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Asong as they got the strings in there hands.. They can mannupulate it to suit their interest.. Little retail traders like you and I get robbed from all directions..
taylor jason
taylor jason Mar 04, 2021 5:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lmaoo who is stealing what? last I checked there isn't a gun held to anyone's head telling them to buy/sell
Viking Fire
Viking Fire Mar 04, 2021 5:46PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
My bank account says otherwise
The Chad Bull
The Chad Bull Mar 04, 2021 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
What a joke. They will keep printing money and everyone knows it. Jerome Powell is a criminal and enemy of the people.
Hans Mueller
Hans Mueller Mar 04, 2021 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Everyone manipulating the markets is a criminal, especially those billionaires who have more money than the government.
taylor jason
taylor jason Mar 04, 2021 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
lmao what? if it was for the fed intervention last April we would be in a depression that would parallel what happened in the 30s. why is criminal because you closed your short position last spring with deep losses?
taylor jason
taylor jason Mar 04, 2021 5:41PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
must say, you definitely are a "chad" with views like that
Mike Brarey
Mike Brarey Mar 04, 2021 5:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Powell speaking on every day the market is down to pacify it... what is Fed mandate again?
New Jazenevd
New Jazenevd Mar 04, 2021 5:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Obviously enough, the market has very low confidence in Biden’s ability to handle US economy. Not surprising.
David Canann
David Canann Mar 04, 2021 5:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Semiconductor stocks, already feeling the heat from the chip shortage that has forced semis to rein in production, played a role into broader sector retreat." Extremely high demand forces a slowdown in production? How is this the case?
Kyle Gill
Kyle Gill Mar 04, 2021 5:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Semis like Marvell and AMD do not do their own manufacturing of chip components.
Mike Chen
Mike Chen Mar 04, 2021 5:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Nobody believes it is a bubble and the bear has awaken because we believe the govt will push the market higher forever.
taylor jason
taylor jason Mar 04, 2021 5:02PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
after a 30% gain in 3 months I would think any rational investor can expect a pullback
Leon Kelly
Leon Kelly Mar 04, 2021 4:56PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Healthy pullback... ******if you went long on anything after Dec though..
Hade lHabe
Hade lHabe Mar 04, 2021 4:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Casador Del Oso
Casador Del Oso Mar 04, 2021 4:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I will be looking to load up on XOUT once the SP500 enters the 2700 to 2200 range.
taylor jason
taylor jason Mar 04, 2021 4:36PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
not happening any time soon
Mitchel Pioneer
Mitchel Pioneer Mar 04, 2021 4:34PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Rallies" set closing highs, while losses are halved.  Only in the greatest investment fraud in the world, the US Ponzi Scheme.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email