U.S. equity markets climbed Monday as investors went bargain shopping in the beaten-down tech sector, which has come under pressure this year as the Fed continues to unveil its ongoing strategy for raising interest rates.
It was a strong day for the Nasdaq, which climbed 271 points, while the TSX added 132 points, as oil prices rose over speculation that European nations could shift away from Russian energy sooner than expected.
Wall Street indexes fell Tuesday after Fed governor Lael Brainard’s comments that the central bank is strongly committed to cutting inflation this year, a sign that the Fed may raise rates by 50 basis points at its next meeting. Following Brainard’s remarks, Wall Street’s selloff accelerated, and government bond yields jumped. The TSX also ended in the red, dragged down by the energy and materials sectors.
Bond yields hit their highest level in three years, and the Nasdaq logged a decline of over 2% for a second straight day on Wednesday. Government bonds sold off for a fourth straight session after minutes from the Fed’s March meeting further detailed the central bank’s plans to fight inflation. After falling 2.3% on Tuesday, the Nasdaq shed an additional 2.2% Wednesday, as tech stocks continue to fall in the wake of the Fed’s plans. Canada’s TSX also closed lower Wednesday, with the tech sector posting a 3.3% drop for the day.
After being down for much of the day, North American markets staged a late rally Thursday to secure nominal gains, breaking a two-day losing streak. Finally, in yield curve news, the U.S. yield curve remained slightly inverted between 2- and 10-year Treasurys on Monday, but steepened slightly later in the week.
North American Markets Lose Ground
For the four trading days covered in this report, the Dow lost 235 points to close at 34,583, the S&P 500 dropped 46 points to settle at 4,500, while the tech-heavy Nasdaq sunk 364 points to close at 13,897. In Canada, the TSX lost 118 points to end at 21,835.
source https://richarddri.ca/tech-stocks-decline-as-investors-weigh-fed-plans/
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