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Wall Street Opens Lower on Inflation Fears; Nasdaq Down 1.4%

Stock MarketsSep 28, 2021 09:49AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- U.S. stock markets fell at the opening on Tuesday as fears of inflation continued to push up bond yields, pressuring valuations that have been supported since the start of the pandemic by extraordinary stimulus measures.

By 9:45 AM ET (1345 GMT), the Nasdaq Composite was down 1.4%, near its lowest level in a month, while the S&P 500 was down 0.8% and the Dow Jones Industrial Average was down 100 points, a relatively modest 0.3%. 

As on Monday, the Dow's outperformance was due largely to strength in banking, energy and other 'value' stocks, whose stronger near-term cash flow leaves them better able to cope with rising interest rates.  The 10-Year Treasury yield rose to a new three-month high of 1.56% before retreating a little to 1.54%.

The market was unsettled by the pre-release of Federal Reserve Chairman Jerome Powell's testimony to Congress, due at 10:00 AM ET, which acknowledged that inflation inflation had been stronger than expected and is likely to remain "elevated" for at least some months.

While inflation during the economic rebound this year has been tied to certain sectors, rather than a broadly based rise in prices, it has grown increasingly acute in the last few months, with further evidence of the phenomenon Tuesday in national house prices, which rose 19.2% on the year through August. 

There were conspicuous drops in some of the heavyweight tech names that have been responsible for much of the broader market gains this year. Microsoft (NASDAQ:MSFT)t stock and Amazon (NASDAQ:AMZN) stock both fell 2.0%, while  Alphabet (NASDAQ:GOOGL) stock fell 2.6% and Facebook (NASDAQ:FB) stock fell 2.7%, as investors booked profits to focus on stocks with less challenging valuations. 

Vaccine makers were among the biggest fallers in early trading, amid optimism that the worst of the pandemic is now at least behind the U.S., if not the rest of the world. New infections have fallen by over half since their peak earlier this month, with deaths also seemingly past their peak. Moderna (NASDAQ:MRNA) stock fell 5.8% while Novavax (NASDAQ:NVAX) stock fell 7.1%, Studies showing that Moderna's vaccine may protect people against Covid-19 for longer than rival Pfizer (NYSE:PFE)'s have worked against the stock in the last couple of days, suggesting that there may be less need for health authorities to buy booster shots from the company.

Energy stocks were broadly supported by the continued rise in natural gas prices, even though crude oil prices fell back after the global benchmark Brent touched a three-year high of over $80 a barrel overnight. Exxon Mobil (NYSE:XOM) stock rose 0.8% while Chevron (NYSE:CVX) stock rose 0.5%. Amid smaller names, Camber Energy (NYSE:CEI) stood out with a 15% rise, as retail traders piled in on a characteristic squeeze of a stock thought to be heavily shorted.

Wall Street Opens Lower on Inflation Fears; Nasdaq Down 1.4%
 

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Comments (19)
Rob Roo
Rob Roo Sep 28, 2021 12:46PM ET
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Are you happy, you geniuses, for voting for Biden?
Kochar Bipin
Kochar Bipin Sep 28, 2021 11:57AM ET
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The pandemic has resulted in a bunching of demand which results in prices realigning to adjust demand to supply. Higher one-time inflation at this stage is a natural economic adjustment to bring national debt to GDP and fiscal deficit back to normal level
Cali Cartel
Cali Cartel Sep 28, 2021 11:52AM ET
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Oh guess what? ‘Inflation fears’ again!
Sep 28, 2021 11:18AM ET
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Is it too much exaggerated of worry or too much of greedy?
Zeb Fullmer
Zeb Fullmer Sep 28, 2021 11:14AM ET
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if there were inflation fears wouldn't the market be doing the opposite?? c'mon
Mohd Izhar Muslim
Mohd Izhar Muslim Sep 28, 2021 11:07AM ET
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looking forward ,hope will be better
Mitchel Pioneer
Mitchel Pioneer Sep 28, 2021 11:01AM ET
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The breaker trips at 11, and here comes a miraculous recovery of losses.  Remarkable how "rallies" don't tank at 11.  Fraudulent, criminally manipulated joke.
Antonio Velardo
Antonio Velardo Sep 28, 2021 11:01AM ET
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If you know this perfectly happens all the time i guess you can make a lot of money.
zzz zzz
zzz zzz Sep 28, 2021 10:55AM ET
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wut
MarkB Smith
MarkB Smith Sep 28, 2021 10:47AM ET
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I hope they do sell Precious Metals. Bullion Prices were to high for me!
Mohamed Khalifa
_Khalifa_ Sep 28, 2021 10:46AM ET
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Inflation fears !!!
Heine Pedersen
Heine Pedersen Sep 28, 2021 10:43AM ET
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INFLATION!? Sell all your precious metals and buy the dollar! That's how things works these days..
Antonio Velardo
Antonio Velardo Sep 28, 2021 10:38AM ET
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Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren told they will sell their stock holdings by the end of the months. It looks like a coincidence 🤔
dav lo
dav lo Sep 28, 2021 10:25AM ET
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fear again, inflation, then tomorrow will say China Evergrand, then tapering. I said you looping psycho
Mario tragik
Mario tragik Sep 28, 2021 10:23AM ET
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lol fear mongering starts again, then to magically buy that dip and your shares on sale. what a joke.
Kuldeep Gill
Kuldeep Gill Sep 28, 2021 10:23AM ET
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All manipulation. Small players are getting wiped out.
ZS Beck
ZS Beck Sep 28, 2021 10:22AM ET
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Everybody blaming the FED, the FED is nor the one who spends it. it’s the goverment. They just loan it out with interest . it’s just a bank .
Phil Davis
Phil Davis Sep 28, 2021 10:22AM ET
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That is very true. The fed haters, usually gold bugs, have been swallowing the Kool aid for decades.
Stefan Kunco
Stefan Kunco Sep 28, 2021 10:19AM ET
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Inflation again?Inflation is every year. FED ,you have a different news? Like parrot :bad,bad,bad bad.
Stan Smith
Stan Smith Sep 28, 2021 10:17AM ET
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OMG the FED lied. Inflation isn't transitory...I'm sure this is just a one off though...everything is awesome ....right? ;-)
Roger Miller
Roger Miller Sep 28, 2021 10:15AM ET
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Housing prices up 19.2%…I thought the Fed was trying to increase employment not homelessness.
Mitchel Pioneer
Mitchel Pioneer Sep 28, 2021 10:06AM ET
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10AM sharp, and with flagrant predictability, the biggest investment JOKE in the world hits the floor.  Time for some intraday magic in the laughingstock of the financial world.
 
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