Wall Street closed lower on Monday as investors began a short holiday week looking to avoid risk as rising bond yields weighed on market-leading growth stocks ahead of key inflation data.
All three major US stock indices closed lower, with the NASDAQ being the hardest hit by tech and related stocks.
“There have been two types of selling in the last month or two,” said Peter Tuz, president of Chase Investment Counsel. “On the one hand, the increase in yields, which mainly affects technology and other growth stocks, and on the other hand, the sale due to the recession/economic slowdown, which affects energy and raw materials (…) Yesterday They both saw each other.”
The 10-year US Treasury bond yield approached three-year highs ahead of key inflation data expected on Tuesday.
The Federal Reserve has promised to aggressively tackle inflation, and market players expect a series of 50 basis point rate hikes.
“All eyes are on an inflation figure that is likely to be the highest in 40 years, which could lead to larger and more frequent rate hikes,” Tuz added.
The Labor Department’s CPI report is expected on Tuesday to see if there are any signs that the wave of inflation has reached its zenith. Analysts expect it to show year-on-year consumer price growth of 8.5%, the highest reading since 1981.
The S&P 500 lost 1.69% to 4,412.53 points, the NASDAQ Composite fell 2.18 to 13,411.96 points and the Dow Jones Industrial Average fell 1.19% to 34,308.08 points.
In Mexico, the S&P/BMV IPC and the FTSE BIVA registered six consecutive falls. The former fell 0.41% to 54,463.83 points yesterday and the latter lost 0.48% to 1,124.55 units.