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S&P 500 Closes Down as Powell Nod Triggers Yield Surge, Dents Tech

Stock MarketsNov 22, 2021 04:21PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The S&P 500 give up gains to close lower Monday, led by selloff in tech as investors maintained bets on earlier rate hikes following news that Federal Reserve Chairman Jerome Powell would be nominated for another term. 

The S&P 500 fell 0.32%, and had earlier hit an intraday record of 4,743.74, the Dow Jones Industrial Average was up 0.1%, or 17 points, the Nasdaq fell 1.26%.

President Joe Biden nominated Jerome Powell for a second four-year term as U.S. Federal Reserve Chair and nominated Governor Lael Brainard to vice chair.

Treasury yields jumped on the news, suggesting that some had been betting on Brainard, who leans more dovish, which would likely have led to a lower for longer approach on monetary policy.

The United States 10-Year surged above 1.6%, helping to stoke a bid on banking stocks.

Energy stocks, meanwhile, followed oil prices higher after OPEC+ warned it would reconsider plans at its meeting next week to increase production cuts should countries tap their strategic energy reserves.

The threat from OPEC comes just as reports suggested the U.S. is considering the release of oil from the Strategic Petroleum Reserve in tandem with other countries including Japan.

Tech, which was the standout performer last week, underperformed as the rising yields soured sentiment on the sector.

Excluding Apple (NASDAQ:AAPL) big tech including Meta, formerly Facebook (NASDAQ:FB), Google-parent Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), and Microsoft  (NASDAQ:MSFT) ended in the red. 

On the economic front, housing activity remained buoyant as existing home sales in October rose by more than 0.8%. This "doesn't seem like a big increase, but it comes on the back of a 7% monthly gain in September and most forecasters were looking for some payback," Jefferies said.

The late selloff on Wall Street comes as some forecast headwinds in the coming weeks for stocks, which have advanced into overbought territory, though that is unlikely to hamper a seasonal rally into year end.

“Year-end seasonality typically favors stocks into Dec. 31, although we could experience some choppiness along the way due to overbought conditions,” Janney Montgomery Scott said in a note.

In other automotive news, Tesla (NASDAQ:TSLA) increased 1% after CEO Elon Musk said in tweet that the company would "probably" launch its Model S Plaid electric sedan in China early next spring.

In health care, meanwhile, vaccine makers BioNTech SE (NASDAQ:BNTX), and Moderna Inc (NASDAQ:MRNA) were in the ascendency with latter up more than 7% after receiving final clearance for their booster shots from the Food and Drug Administration on Friday.

General Motors (NYSE:GM), meanwhile, was up more than 2% after CNBC reported the automaker acquired a 25% stake in the Seattle-based boating start-up Pure Watercraft.

S&P 500 Closes Down as Powell Nod Triggers Yield Surge, Dents Tech
 

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Comments (13)
George Pichurov
George Pichurov Nov 23, 2021 4:26PM ET
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More dovish than Jerome Bubble? Ha, are you talking Zimbabwean States of America?
Matthew VS
Matthew VS Nov 22, 2021 9:05PM ET
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Powell is the worst thing to ever happen to America's finances since Biden was selected as president and Biden is the worst thing to happen to America's finances since our nation was founded. He is just another cog in the socialist machine.
Sarunas Simkus
Sarunas Simkus Nov 22, 2021 9:05PM ET
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Reminder: On November 2, 2017, President Donald Trump nominated Powell to serve as the chair of the Federal Reserve, replacing Janet Yellen at the helm of the central bank.
Benny George
Benny George Nov 22, 2021 8:35PM ET
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Uptrend is intact but not soon. Inflation really matters!
DrFunkenstein hayson
DrFunkenstein hayson Nov 22, 2021 8:33PM ET
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what a circus act. it means nothing. they can never raise rates again. what don't people understand? the fed is done, the game is over
Kevin Avila
Kevin Avila Nov 22, 2021 8:33PM ET
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Your account is going to be done if this is what you believe…
Mark Manley
Mark Manley Nov 22, 2021 6:56PM ET
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More proof that Biden hates America
New Jazenevd
New Jazenevd Nov 22, 2021 5:39PM ET
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The market reaction to Powell’s renomination was uneven. Enough to say, writers had to change tune few times during the day. However, at the end, more “hawkish” Powell is unlikely to differ much from the same Powell, already leading the Fed. It means print money and talk about tapering. The market uptrend will not change.
Empire Destroyer
Empire Destroyer Nov 22, 2021 5:39PM ET
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Just a bit more sell off and we can long
New Jazenevd
New Jazenevd Nov 22, 2021 5:39PM ET
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Empire Destroyer  Some dipping is always ossicle, though dips are very brief and shallow. Frankly, I  force myself to forget old-school advices about waiting for “the bottom” and buy earlier instead.
Modern Matrix
Modern Matrix Nov 22, 2021 5:39PM ET
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they were just looking for an excuse to drop it.
New Jazenevd
New Jazenevd Nov 22, 2021 5:39PM ET
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Modern Matrix  They are always looking for excuses, either to drop it or to raise it. This is new brave AI market.
robert mandry
Rob2Trade Nov 22, 2021 5:32PM ET
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That was quite a violent sell off. I havent seen that in a while.
Salomón Gaona
Salomón Gaona Nov 22, 2021 5:32PM ET
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Not really. The price fell without volume and momentum, when a sell of its triggred you can see the price falling really fast, at least 20 to 30 points (For me Micro SP&500) in about 1 or 2 minutes, after that the price keeps falling more and more. You can easily make a good profit if you know who to hold your emotions for 1 or 2 hours.
me ish
me ish Nov 22, 2021 4:57PM ET
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more dodgy news from Musk (and friends incl his buddy at Hertz). In other automotive news, Tesla (NASDAQ:TSLA) increased 1% after CEO Elon Musk said in tweet that the company would "probably" launch its Model S Plaid electric sedan in China early next spring. - enough to send the price to almost previous highs so he and his brother can dump more stock at top prices- and so the devotees lap up the shares he's selling at crazy high prices, so they can hold the bag when the reality of the global economy finally reaches the markets in the next few weeks - SUCKERS!!!!
Kent Wilson
Kent Wilson Nov 22, 2021 4:57PM ET
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buy a put option
Co Gonz
Co Gonz Nov 22, 2021 4:49PM ET
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fake market, fake president
arthur santos
arthur santos Nov 22, 2021 4:49PM ET
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fake YOU too!😡
Mitchel Pioneer
Mitchel Pioneer Nov 22, 2021 4:47PM ET
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The laughable "market" is a pure, unadulterated fraud.
Foziiya Ahmmad Umar
Foziiya Ahmmad Umar Nov 22, 2021 4:46PM ET
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Foziiya Ahmed yusuf
Bear Bull
Bear Bull Nov 22, 2021 4:39PM ET
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What a joke, we knew this a week earlier! Why would they pump on thursday and friday?
Empire Destroyer
Empire Destroyer Nov 22, 2021 4:39PM ET
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Not to mention spike Tech to another ATH to eat SLs before dropping it like crazy
Thomas Ho
ThomasH Nov 22, 2021 4:39PM ET
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It's why I don't use large SL and walk away. Got burned too many times. However, I do like SL for rally/breakouts because you never know how high.
Kerry kong
Kerry kong Nov 22, 2021 4:33PM ET
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You are the best, Powell. I love you so very much.
me ish
me ish Nov 22, 2021 4:33PM ET
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well I never thought I'd hear that on here - literally the fraudster who is destroying the USD and taking the economy down with it, so he and his friends can line their pockets and buy up every undervalued asset in the world - before the USD sinks to zero toilet paper value.
Antonio Velardo
Antonio Velardo Nov 22, 2021 4:33PM ET
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USD is doing good against EUR and ones with long positions on the stok market are doing great.
 
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