Global stock indexes slipped and U.S. Treasury yields fell on Tuesday as low trading volume, a lull in economic news and the lack of a catalyst to raise stocks sparked a sell-off by investors worried that the market rise is limited.
The tech-rich Nasdaq (.IXIC) fell 1.9%, its largest single-day decline in nearly six weeks, while the yield on 10-year Treasuries fell to 1.557%, a drop that would normally cause technology stocks to rise. on lower financing costs.
A surge in commodity prices has withstood the decline in stock markets, helping to stimulate discussions about rising inflation, as the dollar rose after U.S. Treasury Secretary Janet Yellen said rates d interest may have to increase to avoid overheating the US economy. Read more Yellen subsequently downplayed concerns about inflation and rising rates.
The CRB Refinitiv / CoreCommodity Index (.TRCCRB) traded near its three-year highs as commodities rallied on investor bets that demand will increase as economies reopen.
Investors sold off the tech-related high-tech stocks that have doubled the value of the Nasdaq since the March 2020 low and bought government debt, pushing yields lower.
Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Microsoft Corp led the decline on the Nasdaq and S&P 500.
“Traders are not very convinced of how the markets should move from here,” said Patrick Leary, chief market strategist and senior trader at Incapital. “We took into account a great deal of reopening optimism. “
MSCI’s benchmark for global equity markets (.MIWD00000PUS) fell 0.81% to close at 697.60.
On Wall Street, the Dow Jones Industrial Average (.DJI) rose 0.06%, the S&P 500 (.SPX) fell 0.67%, and the Nasdaq Composite (.IXIC) fell 1.88%.
Economically sensitive value stocks (.RLV) gained 0.04%, outperforming a 1.6% decline in growth stocks (.RLG). After Tuesday’s drop, the Russell 1000 Value Total Return Index (.RLVTRI) nearly tripled the performance of the Russell 1000 Growth Total Return Index so far this year.
European tech stocks (.SX8P) plunged 3.8% on their worst day since late October. The German stock exchange (.GDAXI) lost 2.5%, the most in Europe, due to its high composition in technology stocks.
Chipmaker Infineon (IFXGn.DE) fell 5.9%, among the main drag on the German index, after the company said auto supply constraints would ease only in the second half of the year , the loss of volumes being likely to be offset in 2022.
Skepticism has crept into the Treasury market that future economic data may not be as bright as the market has taken it in, which has held back longer-term bonds. The benchmark 10-year Treasury note last fell 1.587%.
In currency markets, the dollar recovered some ground to partially offset last month’s long decline as investors rallied positions ahead of monthly payroll data expected at the end of the week.
The dollar index rose 0.289%, with the euro down 0.36% to 1.2018. The Japanese yen weakened 0.19% against the greenback to 109.28 per dollar.
Signs that the world’s major central banks are in no rush to crack down on their massive stimulus packages have kept 10-year US Treasury yields below 1.65% and German Bund yields below 13 highs. month.
Australia’s central bank left key interest rates near zero overnight for a fifth meeting in a row and pledged to keep its policies very supportive for an extended period. Read more
Australia’s S & P / ASX200 (.AXJO) was up 0.6% and Hong Kong (.HSI) was up 0.7% in Asian thin trading due to the holidays in China and Japan.
The cryptocurrency ether hit another all-time high, near $ 3,500, before slashing gains to close 0.8% lower.
Oil prices rose after more US states eased lockdowns linked to the pandemic and the European Union sought to attract travelers, although the surge in COVID-19 cases in India capped gains .
Brent futures stabilized at $ 1.32 to $ 68.88 per barrel, while U.S. crude futures rose $ 1.20 to $ 65.69 per barrel. barrel.
Gold fell 1% on Yellen’s remarks, with rising rates increasing the opportunity cost of holding the unpaid precious metal.
US gold futures stabilized 0.9% at $ 1,776 an ounce.
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