Wall Street ended lower on Tuesday, led by decline in tech-stocks. The U.S Bond yields increased to multi-year highs. There were concerns about rising inflation due to the Russia-Ukraine war. Moreover, the Fed’s plans to hike interest rates kept recession fears alive. All the three major stock indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.8% or 280.7 points to close at 34,641.18. Twenty-one components of the 30-stock index ended in the red zone, one remained unchanged, while eight remained in green.
The tech-heavy Nasdaq Composite dropped 2.3% or 328.39 points to close at 14,204.17, due to weak performance of tech-stocks.
The S&P 500 lost 1.3% or 57.52 points to end at 4,525.12. Seven out of the 11 broad sectors of the benchmark index closed in the red zone.
The Consumer Discretionary Select Sector SPDR (XLY), the Technology Select Sector SPDR (XLK) and the Energy Select Sector SPDR (XLE) went down 2.3%, 2.1% and 1.6%, respectively, while The Utilities Select Sector SPDR (XLU) rose 0.6%.
The fear-gauge CBOE Volatility Index (VIX) was up 2.5% to 21.03. A total of 11.4 billion shares were traded on Tuesday, lower than the last 20-session average of 13 billion. Decliners outnumbered advancers on the NYSE by a 4.33-to-1 ratio. On Nasdaq, a 2.96-to-1 ratio favored declining issues.
Aggressive Federal Reserve Signals Interest Rate Hike
Federal Reserve Governor Lael Brainard, in a conference held at the Minneapolis Fed, said that the central bank needs to act aggressively to bring down inflation. She signalled policy tightening was on the cards and that the Fed’s were looking for a speedy reduction in their balace sheet, starting as early as May. Her comments also indicated that interest rates will increase in a steady pace, higher than the traditional increments of 0.25%.
Consequently, shares of other tech giants like NVIDIA Corporation
NVDA
and Advanced Micro Devices, Inc.
AMD
fell 5.2% and 3.4%, respectively. Advanced Micro Devices carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
The 10-year Treasury Bond Hits Three Year High
On Tuesday, the 10-year Treasury note yield hit a high of 2.562% before closing at 2.55%, after the Fed signalled aggressive and tighter policymaking. The move put this benchmark rate well above the 2-year bond, which traded around 2.528%. The 2-year had recently been hovering above the 10-year triggering a yield curve inversion.
Russia-Ukraine Conflict Continues
Apprehension about the situation in the Russia-Ukraine war does not seem to ease off among the investors, as reports suggested that the European Union and the United States were mulling further sanctions against Russia. In a speech to the U.N Security Council on Tuesday, Ukrainian President Volodymyr Zelenskyy said that the Russian troops were committing the most terrible war crimes since the Second World War.
Economic Data
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that foreign trade deficit was $89.2 billion in February, down less than $0.1 billion from $89.2 billion, the revised figures in January. The deficit stays close to a record high.
The ISM Services Index registered 58.3% for March, 0.5% more than the consensus for the current period. February’s reading was 56.5%.
The S&P Global (Markit) Services PMI showed a March figure of 58%, compared to the 58.9% prelim. February reported figures of 56.5%.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
