On Tuesday, all three key indices of Wall Street had wrapped up the session sharply lower, as worries over a potential tax hike alongside infrastructure expenses backing the US President Joe Biden’s $1.9 trillion stimulus bill, had taken a greater toll on investors’ morale while feathering frets of further downside momentum over the coming days.
In point of fact, Wall Street opened up the day in a mixed tenure with benchmark S&P 500 rising higher ahead of Fed's Powell's speech, nonetheless, followed by remarks from US Fed’s Powell and US Treasury’s Yellen, market participants turned tails in late-afternoon session, as a slew of US stocks had rounded off the day in red inks.
Speaking in the testimony, Fed Chair Powell was quoted saying that there would be an inflation-surge in a near term, however had conferred vague attributes about its extent, which in effect drove US Dollar higher and led to an ease-off of US Treasury bond yields, as a robust greenback counters appetite for the riskier assets.
Adding further strains, speaking at a hearing of the House Financial Services Committee, US Treasury Secretary Janet Yellen was quoted saying that the US economy still remained in a crisis-mode and a recovery might require a hike in future taxations, which in effect had prodded investors to set out a sell off wave in late-afternoon trading hours.
Besides, the US Government’s ambitious infrastructure plans as cited by the US Treasury’s Yellen, had overwhelmed Wall Street and rattled investors’ confidence.
Wall Street falls after Yellen unveils tax hikes, infrastructure costs
Citing statistics, in the day’s Wall Street round off, trade-sensitive Dow was slumped just shy of 1 per cent to 32,422.43 and benchmark S&P 500 dropped 0.77 per cent to 3,910.43, while the tech-heavy Nasdaq was nudged 1.12 per cent lower to close out the session at 13,227.70.
Meanwhile, referring to the talks of Biden Administration’s infrastructure plan alongside a tax hike with equity markets appeared largely overvalued, a partner at Cherry Lane Investments in New Vernon, New Jersey, Rick Meckler said, “There’s a little bit of concern of getting out ahead of a potential selloff that could be on the horizon. ”