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S&P 500 Slips as Tech Wobbles on Aggressive Fed Rate Hike Fears

Published 03/21/2022, 01:58 PM
Updated 03/21/2022, 03:46 PM
© Reuters.

By Yasin Ebrahim

Investing.com -- The S&P 500 started the week on the backfoot as tech stocks took a breather after leading the broader market to its biggest weekly gain since November 2020 last week.

The S&P 500 fell 0.30%, the Dow Jones Industrial Average slipped 0.8%, or 281 points, the Nasdaq lost 0.74%.

Growth sectors of the market including tech struggled to add to their gains from a week ago, as treasury yields, the enemy of growth stocks like tech, continued to climb after Federal Reserve Chairman Jerome Powell said the Fed may have to move faster on rate hikes if inflation doesn't abate.  

Powell said on Monday that as expectations of seeing inflation peaking in the first quarter “has already fallen apart,” a further ramp-up in inflation could force the central bank “to move more quickly.”

Meta Platforms (NASDAQ:FB) led the decline in the sector to the downside, following by Microsoft Corporation (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL). Amazon (NASDAQ:AMZN) was flat.

Apple (NASDAQ:AAPL) was slightly higher as Foxconn, one of its biggest suppliers, said that its plants in Shenzhen, China, were nearly fully operational following suspension last week owing to a surge in Covid-19 cases in the region. 

Energy stocks offset some losses in the broader market, underpinned by a surge in oil prices on fresh fears of the supply disruptions amid reports that the European Union is considering a ban on Russia oil.

The conflict in Ukraine, which dragged into its fourth week, shows little sign of abating as hopes fade for a diplomatic solution to end the war. President Joe Biden on Monday called Russia president Vladimir Putin a war criminal for his attacks on Ukraine. Biden also warned that Russia was planning to launch cyber attacks against the U.S. 

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Marathon Oil (NYSE:MRO), Diamondback Energy (NASDAQ:FANG) and Occidental Petroleum (NYSE:OXY) led energy higher, with the latter up more than 8%.  

Consumer discretionary, meanwhile, was dragged lower by weakness in casino stocks including Caesars Entertainment (NASDAQ:CZR), and Penn National Gaming (NASDAQ:PENN) despite a favorable backdrop for sports betting activity as the NCAA's March Madness entered its second week. 

Tesla (NASDAQ:TSLA), however, bucked the trend lower in the sector, rising more than 1% ahead of the opening of the electric vehicle maker’s Gigafactory in Berlin on Tuesday.

Tesla rival Nio (NYSE:NIO) fell more than 2% as Deutsche bank cut its price target on the firm to $50 from $70, but touted optimism ahead on expectations that the Chinese EV maker is on track to increase deliveries to 25,000 a month from 10,000 a month this year. ]

Boeing (NYSE:BA), a major Dow component, fell 4% after China Eastern Airlines (NYSE:CEA) reportedly grounded its 737-800 fleet following a fatal crash in the mountains of southern China.

In other news, Alleghany (NYSE:Y) surged more than 24% after Berkshire Hathaway (NYSE:BRKa) announced plans to buy the insurance company for $11.6 billion.

Latest comments

And the "late trade" magic show doesn't disappoint.  Whether up or down the laughingstock of the financial world always "rallies" in the final minutes.  Criminally manipulated joke.
I still don't get this Growth companies are all I want if rates go up. Do I want to own a company that is growing less than inflation or do I want a company that will double, triple or quadruple revenue over the next few years. Sure no profits now but they will print money when they stop growing and spending so much and get into a more terminal growth phase. This growth fear with inflation is overblown imo
Future $ is worth less in present $ if rates go up.
because their costs increase too much when there is high inflation
Don't worry, everyone will be over it tomorrow until the next panic.
Such bee ess. The Fed governors say the same things week after week and time after time and the market "acts" like it has never heard it before. Comical
I don't know why people invest if they are so afraid?
They gotta blame it on something. Truth is nobody knows where the market goes especially these days. The makers draw the pattern at market open and redirect at market close. Simple as that.
Si it's the market's fault, not the Fed's.  Refreshing to see the Fed NOT blamed for something.
Let the Fed trigger the 2022 recession faster.
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