On Monday, despite staging a late-session comeback following a mass-scale ‘buy-the-dip’ move from market participants, a slew of Wall St. stock indices had closed out the session deep into reds, though, after having been hit with a hefty whiplash of more than 3.0 per cent earlier in the session, Nasdaq managed to eke out a tiny gain.
In point of fact, in the day’s Wall Street had opened up the session sharply lower following a Goldman Sachs forecast that had been quoted saying the US Federal Reserve would highly likely to hike its benchmark borrowing costs at least four times this year, sending shockwaves across US capital markets with Nasdaq tumbling as much as 10.37 per cent below a record closing high reached on November 22.
A higher interest rate is widely seen as a negative impetus for growth stocks such as technology shares. On top of that, a relentless rally in US Treasury bond Yields with 5-year US Treasury bond notes trading at 1.51 per cent, had clouted outlooks for growth stocks alongside riskier assets further.
Apart from that, Nike Inc dipped after HSBC had downsized the sportswear maker’s rating citing supply chain woes.
Wall Street jolts amid intransigent rally in Treasury Yields
Citing statistics, in the day’s Wall St.
wind-down, trade-sensitive Dow dwindled 0.45 per cent to 36,068.87 and benchmark S&P 500 shed 0.14 per cent to 4,670.29, while tech-heavy Nasdaq edged 0.05 per cent higher to 14,942.83. Meanwhile, addressing to mounting market participants’ concerns of a potential downward spiral ahead, a partner of Cherry Lane Investments, Rick Meckler said, “We've gotten to the point where you wonder if the roller coaster has peaked and is heading straight down. But fundamentally there's a lot of buyers in this market buying on the dip”.