Wall St. ends sharply lower amid tech stock sell-off

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Wall St. ends sharply lower amid tech stock sell-off

On Tuesday, a slew of Wall St. stock indices had rounded off the session sharply lower as investors threw away mega-cap growth stocks and turned to defensives amid a broad-based selling wave over concerns of a plausible hike in interest rates amid a sharp uptick in inflation indicators.

In point of fact, in the day’s wide-spread weakness in Wall St. was almost entirely prompted by a remark from the US Treasury Secretary Janet Yellen, who was quoted saying earlier in the day that the interest rates might be raised gradually in the United States, sending shockwaves in global equity market which had already been rattled over frets of overvaluation.

Aside from that, in the latest flashpoint of an inflation-surge in the United States, economic data released earlier in the day had revealed that new orders for US-made core capital goods soared 1.1 per cent in March with US business spending rose robustly, suggesting a sharp shoot up in inflation indicators in a near term amid a spike in domestic demands following US President Joe Biden’s $1.9 trillion stimulus bill.

Nevertheless, since a number of tech-associated growth stocks had been hit with a heavy whiplash in the day’s Wall St. with mega-cap tech stock such as Microsoft Corp, Apple Inc, Alphabet Inc, Amazon.com Inc. alongside Facebook Inc jolting between 1.5 per cent to 3.5 per cent, tech-heavy Nasdaq was nudged just a notch shy of 2 per cent amid investors’ frets that a higher interest rate would more likely to cast glooms on so-called growth stocks.

Wall St. tumbles as US Treasury’s Yellen hints rate hike

Citing statistics, in the day’s Wall St. round off, trade-sensitive Dow edged 0.06 per cent higher to 34,133.03 after paring earlier losses in late-afternoon trading hours and benchmark S&P 500 shed 0.67 per cent to 4,164.66, while Nasdaq tumbled 1.88 per cent to 13,633.50.

Meanwhile, referring to investors’ shift towards cyclicals and defensives amid an uncertain market landscape, a vice president of trading and derivatives for Charles Schwab in Austin, Texas, Randy Frederick, “When we have pauses or pullbacks, people tend to move out of growth stocks into more defensive names.