Wall Street is down, especially technology stocks are under pressure, leading the Nasdaq to slide 1.7%. The S&P 500 also lost more than 1%, while the Dow Jones fell by 255 points (-0.73%).
Big Tech and growth stocks in general pay for the jump in Treasury yields, sparked by fears of higher and longer-lasting inflation than expected. In particular, 10-year rates on US government bonds soared to 1.55% in overnight trading, with investors betting on the Fed’s imminent tapering, due to the jump in inflation in the United States.
The sell-offs particularly hit Big Tech stocks Facebook, Amazon, Apple, Netflix, Alphabet, Nvidia, AMD and Tesla.
The stocks of energy giants such as Exxon, on the other hand, benefited from the surge in oil prices, which saw Brent exceed $ 80 for the first vote in three years and WTI jump over $ 76 a barrel.
US Treasury rates have returned to their highest levels since June since Jerome Powell’s Federal Reserve last week indicated that it will “soon” begin tapering $ 120 billion worth of asset purchases each month.
Among other things, excerpts from the speech that Federal Reserve President Jerome Powell will give today to the US Congress, in a hearing at the Senate Banking Commission, have been published.
The number one of the American central bank clearly warned that, in the United States, inflation could last longer than expected:
“Inflation is high and will likely remain so in the coming months, before moderating the pace – Powell said today in Congress – With the economy continuing to reopen and spending rebounding we are witnessing upward pressure on prices, caused in Particularly from supply bottlenecks in some sectors. These effects are proving to be more sustained and lasting than anticipated, but they will subside and, in so doing, inflation will fall back towards our long-term target of 2% ” .
“We, at the Fed – said Powell – will do everything possible to support the economy for as long as it takes for the recovery to be complete”.
Powell will then speak to the House Financial Services Commission on Wednesday.
Also weighing on the sentiment of the US stock exchange is the decision of the Republicans in the Senate to block a bill by the Democrats that would have financed federal government spending until December, also suspending the debt ceiling until December 2022.
Congress must be able to approve new government funding by Friday and raise the debt ceiling if it is to avoid an unprecedented US default.
Good data from the macro front.
In July, the S&P Case-Shiller US home price index rose 1.5% month-on-month, doing slightly worse than the expected 1.7% rise and slowing from the previous increase. 1.8%.
On an annual basis, the figure jumped by 19.9%, compared to the + 20% estimated and against the + 19.1% in July, confirming however the solidity of the US real estate market.