Wall Street’s main indexes slipped on Tuesday as investors pulled out of heavyweight tech-related stocks and flocked to undervalued banks and industrial stocks amid a rise in U.S. bond yields.Apple Inc, Microsoft Corp, Amazon.com and Broadcom Inc dropped between 0.9% and 2.7%, as U.S. 10-year Treasury yield hit a 14-month high.The Nasdaq is set for its first monthly loss since November as a rise in yields since last month has particularly hit tech stocks which often have a low-rate environment heavily baked into their high valuations.
The index is still about 7% below its all-time closing high, while bets on a speedy economic recovery driven by vaccine distributions and unprecedented stimulus has helped the S&P 500 and the Dow notch record closing highs last week.”We are going through a period where people are adjusting to slightly higher rates,” said Jon Maier, chief investment officer at Global X ETFs in New York.
“An infrastructure plan would benefit the sectors that were typically locked during the pandemic. Materials, industrials are the areas that would benefit from additional spending.”
News Source: CNBC TV 18