Big drop on Wall Street – Nasdaq down 2 percent

Big drop on Wall Street - Nasdaq down 2 percent

Wall Street’s leading stock indices have been dropping since the beginning of Tuesday. At the opening of the stock exchange, the Nasdaq was down 1.50 percent. The S&P 500 fell 1.08 percent, and the Dow Jones fell 1.21 percent.

Tuesday is the first trading day of the week on Wall Street, as US stock exchanges are closed on Monday for Martin Luther King Day, a public holiday in the United States.

At about 5:30 p.m., the three leading indicators on Wall Street look like this:

  • The Nasdaq is down 2.02 percent
  • The S&P 500 fell 1.55 percent
  • The Dow Jones fell 1.41 percent

Technology stocks trended lower in 2022 as interest rates rose. High interest rates usually hurt pockets of growth in the market that rely on low loans to invest in innovation. Their future income looks less attractive when interest rates are higher.

Tesla drops 2.5 percent on Tuesday. Meta and Amazon platforms fell 3.7% and 2.5%, respectively.

Microsoft backs off after it announced that the software giant will buy video game company Activision Blizzard in a $68.7 billion cash deal. On the other hand, shares in Activision Blizzard rose 30 percent.

Or did Goldman Sachs stock plunge more than eight percent after analysts’ expectations for the company’s fourth-quarter results were not met, CNBC writes. Among other things, Goldman’s operating expenses increased 23 percent due to higher salaries for Wall Street employees.

Strong rise in interest rates

Meanwhile, government interest rates showed solid hikes.

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The closely watched two-year interest rate rose to more than one percent for the first time since February 2020, a month before the announcement of the pandemic that pushed the US economy into recession.

The 10-year yield on US government bonds, often referred to as US 10-year bonds, is also at a two-year high.

The interest rate rises to 1.83 percent.

The jump indicates that investors are now preparing for a tighter monetary policy from the US Federal Reserve, CNBC wrote.

Last week, Federal Reserve Chairman Jerome Powell announced more rate hikes ahead. He also announced that financial support related to the pandemic will soon be gone.

The reality is that the market is adjusting to the Fed’s continued “hard-line” development, chief investment officer James Athey at Aberdeen Standard Investments tells CNBC.

Analysts believe that the US Federal Reserve will raise its key interest rate by 50 basis points as early as March.(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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