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Market Snapshot: Dow down more than 500 points as tech-led selloff spills over to broader market


U.S. stocks slumped sharply Tuesday, as a selloff for megacap, tech-related stocks blamed in part on inflation fears broadened out to drag down other sectors.

What are major benchmarks doing?
  • The Dow Jones Industrial Average

    fell 569.89 points, or 1.6%, to 34,172.93..
  • The S&P 500

    gave up 51.02 points, or 1.2%, to trade at 4,137.41.
  • The Nasdaq Composite

    was down 75.27 points, or 0.6%, at 13,326.58.

On Monday, a tech-led selloff sent the Nasdaq down 2.6% to its lowest close since March 31, while the S&P 500 slumped 1%. The Dow gave up a gain of more than 300 points that had taken it to an all-time high above 35,000 to end the day down 34.94 points, or 0.1%.

What’s driving the market?

Big tech shares continued to feel the pain Tuesday, with shares of Facebook Inc
Microsoft Corp. MSFT and Google parent Alphabet Inc.


suffering big losses in early trade, but mostly coming off session lows by midday.

Read: ‘No doubt…that we are in a raging mania in all assets’, says Stanley Druckenmiller

Other sectors, including cyclical areas expected to benefit most from the economic reopening, stumbled. The S&P 500 energy sector fell 2.4%, to lead the move to the downside, while industrials were off 1.8%.

Analysts expect a jump in consumer prices and supply shortages in goods like computer chips and some commodities as economies reopen and pent-up demand is unleashed by households, businesses and entire industries.

“There seems to be modest concern over inflation as of late and that has been cited as the primary catalyst for recent weakness in global equities, said Brian Price, head of investment management for Commonwealth Financial Network.

Long-term interest rates have pushed back to the upside, but remain off the highs seen in March, a move in line with a Fed committed to maintaining a loose monetary policy framework that’s boosting inflation expectations, Price said.

“This has continued to fuel the recent move from growth to value stocks although it seems as though everything is caught up in today’s selloff,” he said. With major indexes not far off all-time highs — both the Dow and S&P 500 finished at records on Friday — it isn’t a shock to see investors “hit pause” and evaluate the catalyst for another move higher, Price said.

Investors are also concerned about the U.S. labor market after a much smaller-than-expected rise in nonfarm payrolls in March was reported on Friday, while companies continue to report difficulties filling open positions.

The National Federation of Independent Business said Tuesday its monthly survey found a record 44% of small businesses said job openings went unfilled in April.

Separately, the Labor Department on Tuesday said job openings in the U.S. topped 8 million in March for the first time ever. There were 7.5 million open jobs in February.

Meanwhile Federal Reserve Board Gov. Lael Brainard, in a Tuesday speech, said an economic boom wasn’t guaranteed and that the central bank should be patient about relaxing its loose monetary policy stance.

Which companies are in focus?
What are other markets doing?
  • The yield on the 10-year U.S. Treasury note

    rose 2 basis points to 1.617%. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index
    a measure of the currency against a basket of six major rivals, was down 0.1% after trading at its lowest since late February.
  • Oil futures flipped between gains and losses, with the U.S. benchmark

    up 0.1% at $65.02 a barrel on the New York Mercantile Exchange Gold futures

    were slightly lower, down 0.1% at $1,835.30 an ounce.
  • European equities fell sharply, with the Stoxx Europe 600

    down 2% and London’s FTSE 100

    falling 2.5%.
  • Hong Kong’s Hang Seng Index

    dropped 2%, while the Shanghai Composite

    rose 0.4% and Japan’s Nikkei 225

    sank 3.1%.

NewsWatch: Investors are ignoring a ticking-time-bomb stock market, says this money manager

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