On Wednesday, all three key indices of Wall St. had closed out the session sharply lower with tech-heavy Nasdaq leading the losses, while benchmark S&P 500 extended declines as inflation fears outweighed market participants’ optimism over a rapid economic recovery as cited by the Fed Chair Jerome Powell and US Treasury’s Yellen in a US Congress testimony on yesterday.
Simply put, in the day’s sweeping downward spiral in all three key indices of Wall St. was almost entirely hinged on the remarks of Fed Chair Powell and Treasury Secretary Yellen as beforementioned, as investors appeared to have sold off so-called growth stocks while stockpiling undervalued shares which would be benefitted by the most following a re-opening of the economy.
If truth is to be told, Fed’s Powell and Treasury’s Yellen, by and large, had hinted an extremely strong economic rebound this year, however, the latter had expressed a potential hike in corporate taxations alongside a step-up in infrastructure-associated spending, eventually detailing sufficient whys and wherefores for Wall St.
investors to jump on the bandwagon of a mass-scale sell-off wave in tech stocks while pricing in heavily on defensives.
Wall Street extends decline as tech stocks totter
On top of that, a further ease-off in Treasury bond Yields with 10-year bond Yields being jolted to 1.6 per cent in the day’s market closure, had botched to restore investors’ confidence on so-called growth stocks, while Apple Inc, Tesla Inc, Facebook Inc, Amazon.com Inc.
alongside Microsoft Corp. led the declines in S&P 500 and Nasdaq. Apart from that, a Reddit-frenzy led main-street buying bonanza seemed to have cooled down following Yellen’s remarks, as Gamestop shares fell as much 18 per cent.
Citing statistics, in the day’s Wall Street closing bell, trade-sensitive Dow closed marginally lower to 32,420.06 and benchmark S&P 500 shed 0.55 per cent to 3,889.14, while tech-heavy Nasdaq took a tattering header of 2.01 per cent to round off at 12,961.89.
Meanwhile, addressing to investors’ optimism over a quick economic recovery that in effect had been heavily weighing on mega-cap tech stocks in recent weeks, a lead equity analyst and portfolio manager at Exencial Wealth Advisors, David Yepez said, “Everybody’s bullish about the prospects of a recovery right now.
In order for the market to bottom we need to have more fear, and I don’t feel like the market has fear right now”.