With the fall registered on Tuesday on Wall Street, the US stock indices recorded their third most relevant decline for the first 18 days of a year, since the Lehman Brothers financial crisis.
These occurred in 2009, when the S&P 500 fell 5.88%, the Dow Jones 5.64% and the NASDAQ Composite 3.02 percent. Considering that same order, the falls registered in the first 18 days of 2016 were 8, 8.25 and 10.36 percent. While in this 2022 the setbacks are 3.97, 2.67 and 7.27 percent.
This Tuesday, shares on Wall Street registered significant declines, shaken by an increase in Treasury bond yields, in anticipation of the Federal Reserve’s reaction to inflation.
The yield on US 10-year Treasury bonds – which offers a glimpse of what will happen to interest rates – stood at 1.87%, its highest value in two years, while market analysts speculated that the Fed could lead interest rates in March double what was initially thought.
Given this scenario and after the US stock market remained closed on Monday, the Dow Jones index lost 1.5% to 35,368.47 points; the NASSDAQ Composite, which concentrates technological values -highly sensitive to interest rates-, fell 2.60% to 14,506.90 integers; and the S&P 500 fell 1.8% to 4,577.13 units.
In the accumulated index for the year, the three indices remain in negative territory, with the Dow Jones falling 2.67%, the S&P 500 3.97% and the NASDAQ 7.27 percent.
Banks and technology
In particular, weak quarterly results from Goldman Sachs weighed on financial stocks and technology stocks returned to their earlier-year decline, while US Treasury yields rose.
The losses of the technology sector were -2.49% and the financial sector -2.30 percent. Among the biggest falls were the biotech company Moderna (-8.85%), the investment bank Goldman Sachs (-6.97%) and the digital accommodation platform Airbnb with (-5.67%).
Others such as JPMorgan, Meta Platforms (formerly Facebook), NVIDIA and Advanced Micro Devices also had a negative day, ending with declines of -4.19, -4.14, -3.86 and -3.62%, respectively.
Goldman Sachs was the latest Wall Street financial giant to be punished by investors, falling almost 7% despite reporting a record annual profit in 2021 and due to higher spending on employee compensation due to the tight labor market. But it missed quarterly earnings expectations on weak brokerage activity.
“The financial sector is crumbling a little bit under the weight of unimpressive quarterly results, which is probably the biggest factor,” said Chuck Carlson, CEO of Horizon Investment Services.
Activision Blizzard rose 25.88% after Microsoft announced its intention to buy the video game giant for $68.7 billion. Microsoft fell 2.43 percent.
Investors are keeping an eye on the Fed’s monetary policy meeting, seeking clarity on central banks’ monetary policy.