Sharp decline in Wall Street thanks to the weak data on consumer confidence that added to an already weak context in light of the heightened inflationary fears and the consequent possible restrictive moves by the Fed. In this regard, from the speech that Jerome Powell to US Senate shows that inflation is seen “high and will probably remain so in the coming months, before slowing down”.
US consumer confidence has unexpectedly dropped to a low since February as rising COVID-19 infections intensified concerns about the economy’s near-term outlook.
Treasury yields shot up to their highest levels since June (10-year in the 1.56% area) with a sharp increase in volatility (VIX index at 24, up 28%).
The Dow Jones Industrial Average lost 1.6%, the S&P 500 over 2%, the Nasdaq Composite 2.8%. Big Tech are in great trouble (-3.8% Alphabet, -3.3% Amazon and -4% Facebook) with the entire tech sector paying for the increase in bond rates.