Treasury yields surged as the dollar slipped. Oil fell below US $ 40 a barrel to its lowest since late June.
The worst of Friday’s stock sell-off appears to stem from fears that the recent boom in tech stocks may not be related to general investor sentiment, but rather to a company’s outsized options trades. The Financial Times reported that SoftBank had bought billions of dollars in technology derivatives before the rout that began Thursday.
Traders are looking to find an appropriate valuation for tech stocks and assess the health of the U.S. economy as the coronavirus pandemic rages on after killing more than 180,000 Americans. While the industry generates successful profits during home lockouts, there is also evidence that top names are overheated.
“It’s these overcrowded names that were excessively owned that are being sold again,” said Dan Russo, chief market strategist at Chaikin Analytics. “These are the high valuations, stocks have just been stretched.”
Elsewhere, emerging market equities fell for a third day. European stocks fell. Asian stocks fell, with the Australian benchmark posting the largest drop since May.
Here are the latest market movements:
- The S&P 500 Index fell 0.8 percent at 4 p.m. New York time.
- The Nasdaq 100 index fell 1.3%.
- The Stoxx Europe 600 index fell 1.1 percent.
- The MSCI Asia Pacific index fell 1.2 percent.
- The Bloomberg Dollar Spot Index fell 0.1 percent.
- The euro was little changed at US $ 1.1847.
- The Japanese yen was little changed at 106.21 per dollar.
- The yield on 10-year treasury bills rose eight basis points to 0.71%.
- Germany’s 10-year yield rose two basis points to -0.48 percent.
- Britain’s 10-year yield climbed three basis points to 0.26 percent.
- West Texas Intermediate crude fell 4.5 percent to US $ 39.51 per barrel.
- Gold rose 0.2% to US $ 1,935.23 an ounce.
- Silver rose 1.3% to US $ 26.93 an ounce.
– With the help of Adam Haigh, Todd White, David Wilson, Robert Brand and Sophie Caronello.