New York — Major US stocks on Monday, driven by a drop of more than 2% in Nasdaq, as investors sold high-tech and big-growth names ahead of the expected Fed hike this week. The index has almost fallen.
The Dow ended flat and financial and healthcare stocks gave the index some support.
The progress of the conflict between Ukraine and Russia increased investor vigilance as the delegation of Russia and Ukraine held a fourth round of talks on Monday, but no progress was announced.
Apple Inc.’s share price fell 2.7%, making it the heaviest on the S & P 500 and Nasdaq. This is after Hon Hai Precision Industry Co. Ltd., known as supplier Foxconn, shut down operations in Shenzhen, China, as cases of COVID-19 increase.
The Federal Reserve is expected to raise interest rates on Wednesday for the first time in three years to combat rising inflation.
Paul Norte, Portfolio Manager, Kingsview Investment Management, Chicago, said:
“The stock market will be challenged in the future, and today is another example.”
The biggest stumbling block to the S & P 500 was the technology sector and consumer discretion. Rising interest rates are negative because the valuation of technology and growth stocks is highly dependent on future cash flows.
The Dow Jones Industrial Average rose 1.05 points to 32,945.24, the S & P 500 fell 31.2 points (0.74%) to 4,173.11, and the Nasdaq Composite Index fell 262.59 points (2.04%) to 12,581.22.
The Russell 2000 Index for small-capitalization stocks fell 1.9%, down more than 20% from its November highs. The Cboe Volatility Index, also known as Wall Street’s Fear Gauge, has risen.
The S & P financial index rose 1.3% as US Treasury yields jumped to a two-and-a-half-year high. The healthcare sector rose 0.7% and UnitedHealth Group rose 1%.
Energy fell 2.9% as Brent crude fell below $ 110 a barrel in a week after Brent crude rose to $ 139 due to the Ukraine crisis.
Oil and other commodities prices have skyrocketed following severe western sanctions on Russia.
The diminishing problem outperforms the ongoing problem on the New York Stock Exchange by a ratio of 3.05: 1. At Nasdaq, a 2.97: 1 ratio favored the fallen.
The S & P 500 posted 11 new 52-week highs and 32 new lows. The Nasdaq Composite recorded 26 new highs and 615 new lows.
Volume on the US exchange was 14.26 billion shares, compared to an average of 13.7 billion shares for all sessions over the last 20 trading days.