US stocks fall, led by declines in technology companies

Tech companies led a broad slide in stocks on Wall Street as investors look ahead to the company’s upcoming earnings reporting season and what it will reveal about the future. Inflation Effect on corporate profits.

The S&P 500 fell 1.7%, adding to its recent losses. The Dow Jones Industrial Average was down 1.2% and the technology-focused Nasdaq was down 2.2%. The S&P 500 and Nasdaq are both exiting their first weekly losses in four weeks.

Bond yields rose. The yield on the 10-year Treasury rose to 2.78% from 2.71% late Friday. Bonds rose on expectations of higher interest rates as the Federal Reserve moves to crush inflation.

The market is “still reacting to what’s happening in the bond market,” said Willie Delwich, investment analyst at All Star Charts. “You’ve got returns, not just in the US but around the world, they’re moving up sharply and that’s putting pressure on (stocks) overall. That was the story last week, and that’s the story this week.”

Higher rates hurt all kinds of investments, especially stocks that are seen as the most expensive, such as those of big tech companies. Since bonds offer better returns in exchange for less risk, this makes expensive stocks less attractive, which is why heavy selling has been concentrated in technology stocks and other developing stocks as inflation fears rocked the market.

Technology stocks were once again the biggest market weights on Monday. Microsoft shares fell 3.9 percent and Apple 2.6 percent.


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All 11 sectors declined in the S&P 500. The index closed down 75.75 points to 4,412.53 points. The Dow Jones lost 413.04 points to 34,308 points, while the Nasdaq lost 299 points to 13,412 points.

Small cap stocks have held up better than the rest of the market. The Russell 2000 index fell 14 points, or 0.7%, to 1980.

Energy stocks were among the biggest losers as they tracked lower oil prices. US crude oil prices fell 4% and Occidental Petroleum fell 3.9%, the largest loss in the S&P 500 Index.

Oil prices are still volatile amid Russia’s invasion of Ukraine, which has increased pressure on global energy supplies. Global oil prices are up just over 25% during the year, although they eased somewhat during the month of April.

Twitter was in the spotlight after that Tesla CEO Elon Musk has said he won’t be joining the company’s board after all. The stock rose 1.7%. Musk recently became the company’s largest single shareholder and is now free to increase his stake.

Investors remain uneasy about rising interest rates, Russia’s war on Ukraine China’s efforts to contain the spread of the Corona virus. In China, automakers and other manufacturers are cutting production after authorities tightened restrictions to help stop it Corona virus outbreak in Shanghai and other cities.

Wall Street will receive several updates this week that could provide more clues as to how the broader economy is doing high inflation.

Investors are waiting for the impact of inflation on the company’s profits

On Tuesday, the Labor Department will release its consumer price report for March, while the Commerce Department will release its March retail sales report on Thursday. These reports have been closely watched as investors try to see how price hikes have affected consumer spending. Any significant slowdown in consumer spending is likely to mean a slower-than-expected economic growth this year.

The latest economic updates come as investors anticipate a more aggressive turnaround from the Federal Reserve as it attempts to mitigate the impact of rising inflation. The central bank has already announced a quarter-percentage point increase in the key interest rate.

Federal Reserve officials indicated in the minutes of last month’s meeting that they were considering raising the US benchmark interest rate by twice the normal amount in upcoming meetings. They also indicated that they would reduce the Fed’s bond holdings, which would raise long-term borrowing rates.

Wall Street will also begin to get more details about the performance of individual companies during the first quarter and what they expect going forward.

“Investors will be looking to see how inflation affects corporate earnings,” Delwich said. “Are companies able to charge consumers higher costs or do they have to eat costs?”

Delta Air Lines and JPMorgan Chase will announce their latest financial results on Wednesday, while UnitedHealth Group, Wells Fargo and Citigroup will announce their results on Thursday.

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