Market Turmoil: Tech Stocks Slide as Dollar and Bond Yields Climb
The stock market was a mixed bag on Monday, with Big Tech names taking a hit as the dollar and bond yields surged. The S&P 500 dropped 0.1%, while the Nasdaq Composite fell about 0.7%. The Dow Jones Industrial Average, which has fewer tech stocks, rose 0.7%.
Fading Hopes for Interest Rate Cuts
The market turmoil comes as investors’ hopes for interest rate cuts this year continue to dwindle. A hot December jobs report has raised concerns that the Federal Reserve will keep rates higher for longer. The 10-year Treasury yield has added to recent gains, touching a 14-month high of 4.8%.
Dollar Surges to Two-Year High
The dollar has surged to a two-year high against major currency peers, with the UK pound coming under particular pressure. This has intensified the spotlight on the Consumer Price Index reading for December, due on Wednesday.
Oil Prices Rise to Five-Month High
Oil prices have risen to their highest levels in five months, with Brent crude climbing more than 2% to trade above $81 a barrel. This comes after the US imposed tougher sanctions on Russia’s crude industry, threatening supply to China and India.
Corporate News: Moderna, Honeywell, and US Steel
Moderna’s stock plunged about 20% after the biotech giant cut its 2025 sales forecast by $1 billion amid soft demand for vaccines. Honeywell’s stock rose as much as 4% after Bloomberg reported the industrial conglomerate is on track to proceed with a breakup amid pressure from activist investor Elliott Investment Management. US Steel’s stock jumped following news reports that rivals Cleveland-Cliffs and Nucor are considering making a joint bid for the iconic steel-maker.
Tech Stocks Lag
Tech stocks have lagged behind, with investors rotating out of the sector. EV giant Tesla, AI chip maker Nvidia, social media company Meta, and iPhone maker Apple all fell more than 1%.
Bitcoin Falls
Bitcoin has fallen 3% over the past 24 hours to hover just below $92,000 per token. Enthusiasm for the token has waned in recent days as risk assets have sold off amid rising US Treasury yields and a higher US Dollar.
Economic Data and Earnings
New York Fed one-year inflation expectations for December are due out today, while KB Home is set to report earnings.
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