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Dow rebounds 500 factors from worst loss since January

This earnings season has very high standards

US stocks climbed Thursday, recovering from heavy losses in the previous session. Investors took on shares after the withdrawal.

The Dow Jones Industrial Average rose 500 points while the S&P 500 rose 1.4% as all 11 sectors traded in the green. The tech-heavy Nasdaq Composite rose 1.7%, but was only down 0.8% recently as investors tried to pinpoint some winners in the battered tech sector. Apple and Microsoft rebounded more than 2%, while Tesla lost ground with a 2.8% decline.

“This bull market has to go on in the end,” said Keith Lerner, chief market strategist at Truist. “Investors who are underweight stocks should try to identify market weakness and become more aggressive.”

Classic reopening businesses, including airlines, jumped after the Centers for Disease Control and Prevention said fully vaccinated people no longer need to wear face masks or stay half a meter away from others in most environments. American Airlines, United and Delta each gained 1%.

The stock market had a huge hit on Wednesday, causing technology stocks to move lower as key inflation data showed above-than-expected price pressures.

The Dow fell 680 points on Wednesday, its worst session since January. The S&P 500 was down 2.1%, its largest one-day decline since February, while the tech-heavy Nasdaq Composite was down 2.6%.

Traders across the board pointed to a rate hike triggered by a higher-than-expected inflation report for the week’s slump.

The Department of Labor reported that the prices American consumers pay for goods and services rose the fastest since 2008 last month, with the consumer price index up 4.2% year over year.

“We don’t think yesterday’s inflationary pressures will change the longer-term case for inflation after trading reopens, and that is ultimately important for markets,” AB Bernstein strategist Inigo Fraser-Jenkins said in a note.

Investors largely shook off another hot inflation report on Thursday. Producer prices rose by more than 6% in April compared to the previous year.

Investors have been quick to dump growth stocks on creeping inflation worries as rising prices tend to squeeze margins and hurt corporate profits. If price pressures get too high over a long period of time, the Federal Reserve would be forced to tighten accommodative monetary policy.

Tech, a best-performing sector in 2020 amid the height of the Covid-19 pandemic, has come under heavy pressure in recent weeks.

The S&P 500 and Dow are still down more than 2% this week. The Nasdaq Composite is the worst performer among the major averages, trailing 4% this week.

Bitcoin fell 9% after Elon Musk tweeted that Tesla would stop car purchases using the digital token for environmental reasons, a surprising reversal for the crypto backer. Coinbase, which just went public with the promise that crypto trading will go mainstream, fell 2% on Musk’s comments.

– CNBC’s Maggie Fitzgerald and Patti Domm contributed to this report.

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Tech-led sell-off intensifies with Nasdaq dropping 2%, Dow falls greater than 300 factors

Tech-led sell-off intensifies with Nasdaq dropping 2%, Dow falls more than 300 points

US stocks fell on Wednesday, causing technology stocks to move lower as key inflation data showed higher than expected price pressures.

The Dow Jones Industrial Average fell 330 points on Tuesday after its worst day since February. The S&P 500 lost 1.3% while the tech-heavy Nasdaq Composite was down 2%.

Selling strengthened after the S&P 500 fell below Tuesday’s lows. A level trader was watching this closely due to the intraday rebound a day ago. As soon as the S&P fell below that low about an hour after it started trading, the benchmark fell even further.

Inflation accelerated last month, at its fastest level since 2008, with the consumer price index up 4.2% yoy, compared with the Dow Jones estimate for a 3.6% increase. The monthly profit was 0.8% versus the expected 0.2%.

Excluding volatile food and energy prices, the core CPI rose 3% over the same period in 2020 and 0.9% monthly. The respective estimates were 2.3% and 0.3%.

“The markets are at all their highs, and much of the reopened trading has already been priced in. So there is no question that the oversized inflation rate could bring us back down a little,” said Mike Loewengart, managing director of investment strategy at E -Trade.

“Remember that the Fed has made it clear that inflation hikes will not necessarily deviate from its simple monetary policy, and that further jumps like this could be temporary. So is this a trend? That remains to be seen,” Loewengart said.

Tech stocks that have been under pressure this week and month saw another decline on Wednesday. Alphabet, Microsoft, Facebook, Amazon, and Apple’s shares all fell more than 2%, while chipmakers Nvidia and AMD’s shares were also lower. Tesla slipped 3%.

The strength of bank stocks and energy stocks, which could do well in an inflationary environment, helped support the broader market. JPMorgan was up 1% while Occidental Petroleum was up 6.5%. Chevron was also trading 2% higher.

The tech sector saw a major reversal during the previous session, with the Nasdaq Composite taking a loss north of 2% and ending the day flat. However, the blue chip Dow lost more than 450 points. The S&P 500 was down 0.9% but avoided its second consecutive 1% loss.

The Technology Select Sector SPDR is down nearly 2% this week and 5% this month as investors re-evaluate the group’s high valuations amid rising inflation.

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Dow closes up 450 factors at its session excessive, posts a successful week

Dow closes up 450 points at its session high, posts a winning week

US stocks climbed Friday, ending the volatile week on a high as stocks that benefited from a successful economic reopening outperformed again.

The Dow Jones Industrial Average closed 452.97 points, or 1.4%, to 33,072.52. The S&P 500 rose 1.7% to 3,974.50, led by energy and materials. The Nasdaq Composite was down 0.8% and ended the session 1.2% higher. All three key benchmarks recovered to their session highs by the end.

Financial stocks rose after the Federal Reserve announced that banks could resume buybacks and raise dividends from late June. The central bank originally announced that it would lift restrictions on the pandemic in the first quarter, but even the belated move gives investors more clarity.

JPMorgan’s shares were up 1.5% while Bank of America was up 2%. Goldman Sachs was up 1%.

Classic re-opening games build on the dynamics of the previous session. American Airlines was up 1% while Royal Caribbean, Carnival and Norwegian Cruise Line were up more than 1%.

President Joe Biden announced a new goal Thursday of distributing 200 million Covid vaccine shots within his first 100 days in office. As of Friday, there have been 100 million coronavirus vaccinations since Biden was inaugurated.

Fears of rising inflation eased after the data showed tamed price pressures. The core consumer spending index, which excludes volatile food and energy prices, rose 0.1% month-on-month, in line with the expectations of economists polled by Dow Jones. Year after year, the measured value rose by 1.4% and was thus slightly below an estimate of 1.5%.

“PCE deflator data, which is softer than expected, supports the idea that government bond yields are likely to consolidate in the near term,” said Edward Moya, senior market analyst at Oanda. “The lower the inflation base, the easier it is for markets to convince themselves that the impending rise in price pressures will be temporary.”

The 10-year US Treasury yield fell from its peak after the inflation data, and most recently rose 3 basis points to 1.65%. The rate jumped 6 basis points earlier.

Meanwhile, consumer sentiment in the US continued to rise during the introduction of the vaccine. A University of Michigan poll released Friday found the consumer sentiment index finalized at 84.9 in March, up from 76.8 in February. Economists polled by Dow Jones expected a value of 83.7.

The Dow and S&P 500 are on track for small wins in the week of consecutive wins. However, the Nasdaq is still lower on the week. The rally to record highs has slowed in recent weeks amid rising interest rates and valuation concerns.

“The market has been feeling rather choppy lately and this could become more of the norm as we enter the second year of recovery,” said Larry Adam, chief investment officer at Raymond James. “These periods, like most, are not moving in straight lines as there will be drawdowns along the way. This is not for concern, but investors should expect and take advantage of some weakness.”

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Shares are set to rebound with Dow futures up 100 factors, Intel shares acquire

5 things to know before the stock market opens Feb 17, 2021

U.S. stocks are likely to rebound on Wednesday as investors again bet on a strong economic recovery from the pandemic.

Dow Jones Industrial Average futures rose 130 points, or 0.4%. S&P 500 futures rose 0.5% while Nasdaq futures rose 0.8%.

Intel’s shares drove market gains that rose nearly 5% after the chip giant announced plans for a comeback. He opened two new factories to manufacture his own chips and those for other companies.

The Dow lost more than 300 points on Tuesday, as Caterpillar stocks fell 3% late in the day as it worried about the surge in new coronavirus cases in the US and abroad. The S&P 500 fell 0.8%, with airlines and cruise lines taking significant losses. The small-cap benchmark Russell 2000 fell 3.58% on its worst day since June.

However, cruise lines and airlines rebounded on the Wednesday before entering the market, with Carnival and United Airlines shares soaring more than 2%. Energy stocks also rebounded as oil prices rebounded.

Fundstrat Global Advisors’ Tom Lee said his clients were concerned about the increasing cases of Covid in Europe, but he believes Tuesday’s sell-off had more to do with the portfolio realignment towards the end of the quarter and superstitious investors a year after took profits at the lows of the market. He is still betting on stocks that will benefit the most from an economic recovery compared to previous post-war periods.

“After the war, cyclical companies will become new growth stocks,” Lee told CNBC. “This is what happened. It happened in Iraq and the Middle East. It happened in Japan. It happened in Korea after the Korean War. It happened in the US after World War II and the Korean War. This is a post-war environment . “”

In many regions of the world there are actually increasing Covid-19 cases as highly contagious variants continue to spread, according to the World Health Organization. Germany and France are extending or enforcing new lockdown measures.

But the pace of vaccination in the US is picking up, with nearly one in five adults now fully vaccinated.

Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen will continue their testimony before the US House Committee on Financial Services on Wednesday. When they first appeared together on Tuesday, the pair acknowledged the highly valued asset prices in the markets but said they are not concerned about financial stability.

“I would say that while the valuation of assets is increased by historical metrics, there is also a belief that with rapid vaccinations the economy can get back on track,” Yellen said during the testimony. “I think in an environment with high asset prices, it is important that regulators make sure that the financial sector is resilient and that markets are functioning well.”

Powell said the economic recovery from the pandemic “has advanced faster than generally expected and appears to be strengthening”.

However, he said the economic sectors hardest hit by the pandemic “remain weak” and the unemployment rate “underestimates the deficit,” so the recovery still has a long way to go.

Government bond yields fell on Tuesday and continued to decline slightly on Wednesday.

General Mills, Tencent, KB Homes and RH are among the companies posting profits on Wednesday.

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Nasdaq trails Dow for fourth straight week, longest streak since 2016

Nasdaq trails Dow for fourth straight week, longest streak since 2016

Chris Hondros | Newsmaker | Getty Images

After a decade of outperformance, investors are finally switching out of technology stocks.

For the fourth straight week, the tech-heavy Nasdaq Composite lagged the Dow Jones Industrial Average. It is the longest such streak since April to May 2016, which was also the only year since 2011 in which the Dow defeated the Nasdaq.

Market experts have been forecasting a technical downturn for years and have consistently been wrong due to the increasing dominance of mega-cap companies such as Apple and Amazon, the frenzy over Tesla and the massive shift in spending to cloud computing.

“It has been frustrating for years to fix this trade,” said Jack Ablin, who oversees $ 12.5 billion as chief investment officer at Cresset.

Ablin said it felt different this time. Beginning in the fourth quarter, his company introduced a new “quality dividend strategy” that moved technology customers to industrial, finance, materials and energy companies. He bet on a democratic course in November, followed by a major stimulus package that would pump money into the economy and lead to inflation and higher interest rates.

President Joe Biden speaks with Vice President Kamala Harris (R) in the Rose Garden of the White House in Washington, DC on March 12, 2021, about America’s bailout plan.

Olivier Douliery | AFP | Getty Images

The 10-year Treasury rose to its highest level in over a year on Friday, hitting 1.642%. Rising interest rates give investors an incentive to shift money towards fixed income securities, while inflation tends to have an overwhelming impact on growth companies as it dampens expectations for future earnings.

Meanwhile, the $ 1.9 trillion coronavirus aid package signed by President Joe Biden Thursday will send $ 1,400 in direct payments to most Americans, expanding child tax credits, and providing rental and utility services .

‘Backlog’

Add to this Biden’s declaration that all adults are eligible for a Covid-19 vaccine by May 1, and the economy is on the brink of a major recovery in 2021.

“There’s a pent-up demand for going out and doing things, going on vacation, going to bars and restaurants,” Ablin said. People will “take all the money on the sidelines and spend it,” he said.

Although Biden and the Democratic Congress are focused on expanding alternatives to green energy, the current prospects for travel and getting back to work benefit traditional oil and gas companies. Within the S&P 500, energy values ​​performed best as a group this year with a plus of 40%. The top performing groups this week were Consumer Discretionary, Real Estate, and Utilities.

The Dow Industrials rose 4.1% over the course of the week to close at a record high of 32,778.64. After three straight weeks of decline, the Nasdaq rose 3.1% to 13,319.87. For the year, the Dow is up 7.1% while the Nasdaq is up 3.4%.

Dow versus Nasdaq in 2021

CNBC

Ablin knows it’s too early for a winning lap. While technology by and large underperforms, there is still a lot of money flowing into even more speculative assets. Bitcoin’s value nearly doubled this year, and a non-fungible token (NFT) by artist Beeple sold for more than $ 69 million in auction through Christie’s on Wednesday.

Ablin said he was just asked about NFTs by a customer Thursday. While he admits he doesn’t have a strong stance on them, he said the market could look very different in the coming months if stimulus recipients choose risky investments instead of traveling and buying consumer goods.

“If it really isn’t spent but plowed into the market, that would pull the rug out of our thesis,” Ablin said. For example, he said, “If they don’t go on vacation, they buy Tesla stock.”

Tesla stock is up 16% this week. But that was after a 30% drop from the previous month.

SEE: NFTs see record prices as artists and Silicon Valley buy in

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Inventory futures rise barely after Dow units document excessive

Stock futures rise slightly after Dow sets record high

A trader on the floor of the New York Stock Exchange.

Source: NYSE

Stock futures rose slightly on Wednesday evening after the market’s blue-chip average hit another record high during regular trading hours.

Futures contracts for the Dow Jones Industrial Average gained 72 points, or 0.2%. Those for the S&P 500 and Nasdaq 100 rose 0.3% and 0.4%, respectively.

The futures move came after the Dow rose 464 points to a record high on Wednesday. The S&P 500 rose 0.6% while the Nasdaq Composite fell slightly as the rotation away from growth stocks resumed.

Wednesday’s gains came as the House passed the $ 1.9 trillion stimulus package and sent it to President Joe Biden. While the bond market digested an auction of 10-year government bonds worth $ 38 billion with no volatility spike.

Rising interest rates in recent weeks have accelerated the move away from technology and growth stocks to more cyclical sectors like energy. Higher interest rates make profits less attractive to investors in distant years and can knock down stocks with relatively high valuations.

“The faster-than-expected acceleration in US economic growth appears to be raising inflation and longer-term interest rates,” said Gary Schlossberg of the Wells Fargo Investment Institute in a note. “The pace of these increases has been a recent concern of investors, but a rebound in interest rates and inflation is a typical occurrence at the beginning of a rebound – faster this time, in our opinion, as economic growth rebounds abnormally.”

However, this week was stronger overall for growth stocks as a rise in the Nasdaq on Tuesday pulled the index out of correction territory. The Invesco QQQ Trust, which tracks the Nasdaq 100, is up slightly this week after falling over the past three weeks.

In terms of data, investors will receive two new pieces of information on the labor market recovery on Thursday. The first number of unemployment claims for the past week will be published at 8:30 a.m. CET. The economists surveyed by Dow Jones expect 725,000 new claims. The January job posting and turnover survey will take place later this morning.

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Dow futures rise greater than 100 factors after Senate passes $1.9 trillion Covid aid invoice

Dow futures rise more than 100 points after Senate passes $1.9 trillion Covid relief bill

Traders work on the trading floor of the New York Stock Exchange.

NYSE

The Dow futures rose on Sunday evening as a new stimulus package from Washington headed for the final passage this week.

Futures contracts linked to the Dow Jones Industrial Average gained 101 points, or 0.3%. Those for the S&P 500 rose 0.2% while those for the Nasdaq 100 fell 0.3%, suggesting that recent underperformance in technology stocks may continue Monday.

The move into the future came after the Senate passed a $ 1.9 trillion economic relief and incentive bill on Saturday that paved the way for an increase in unemployment benefits, another round of economic reviews, and aid to government and local governments paved. The Democratic-controlled house is expected to pass the law later this week. President Joe Biden is expected to sign the bill before the unemployment benefits programs expire on March 14.

The new round of government spending could ripple the US financial market, where the 10-year benchmark yield has risen sharply in recent weeks. The yield rose to 1.62% on Friday after falling below the 1% mark in the calendar year. It was trading at around 1.59% on Sunday evening.

The rapid movement of the tagged bond has also unsettled equity investors and contributed to the weakness of stocks with high valuations.

“10-year returns have finally caught up with other asset markets. This is putting pressure on valuations, especially for the most expensive stocks that hit nosebleed ratings,” said Mike Wilson, chief US equity strategist at Morgan Stanley, in a note.

The stock market pulled through an afternoon rally on Friday that took some of the sting out of a difficult week for soaring momentum names. The tech-heavy Nasdaq ended the week down 2.1% while the S&P 500 rose 0.8%. The Dow, which relied more on cyclical stocks, rose 1.8%.

Friday’s turnaround doesn’t signal that recent market weakness is over, but the divergence between technical and cyclical games shows that the bullish history remains intact, Morgan Stanley’s Wilson said.

“The bull market remains under the hood, with value and cyclicals taking the lead. Growth stocks can rejoin the party once the valuation correction and repositioning are complete,” said Wilson.

In economic terms, starting in January, investors will take a look at wholesale inventory data on Monday. Several economic measures in recent weeks have shown the recovery is accelerating, including a better-than-expected February job report released on Friday.

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Rally picks up steam as market shakes off charge fears, Dow climbs 650 factors

Rally picks up steam as market shakes off rate fears, Dow climbs 650 points

US stocks rose sharply on Monday as government bond yields fell from last week’s highs, alleviating inflation concerns and higher interest rates undermining stock valuations.

The Dow Jones Industrial Average rose 660 points, or 2.2%, led by Boeing, which rose 6.8%. The S&P 500 gained around 2.1% as all 11 sectors traded in the green. The Nasdaq Composite, the tech heavy index that was hit hard last week, also fell 2.1%.

The 10-year government bond yield fell to 1.43% on Monday, a 3 basis point decrease from Friday and a decrease from its recent high of 1.6% on Thursday. The sudden surge in the benchmark yield has rocked stocks for the past week as rising interest rates can jeopardize the relative attractiveness of stocks and compress stock valuation by reducing the value of future cash flows.

Market breadth was strong on Monday with only about 8 stocks trading lower across the S&P 500. On the NYSE, 11 stocks rose for every stock that fell. Economic reopening games like Carnival and American Airlines were at least 3% higher due to optimism about vaccines and economic reopening. Meanwhile, high-growth technology stocks did better as interest rates fell. Apple and Tesla both rose 3%.

“Equity investors continue to view the rise in interest rates primarily as ‘a good thing’ rather than a threat, although the tree was mixed up in several stocks and other parts of the market last week,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group . “The advantages of vaccines versus the challenge of higher rates will be the theme this year.”

The Centers for Disease Control and Prevention Advisory Board unanimously decided on Sunday to recommend the use of Johnson & Johnson’s one-off Covid-19 vaccine for people aged 18 and over. The company expects to initially ship four million cans.

Last week the blue-chip Dow and the S&P 500 lost 1.7% and 2.5%, respectively. Tech-heavy Nasdaq fell more than 4% over the same period after suffering its worst one-day sell-off since October on Thursday. Technology companies rely on being able to borrow money at low interest rates to invest in future growth.

“The oversized rotation suggests that there may be a tactical reversal as returns calm down,” said Keith Parker, equity strategist at UBS, in a note. “The result should more than make up for headwinds over the course of the year, albeit with downward trends in this upward trend.”

On the stimulus front, the House passed a $ 1.9 trillion Covid Relief Act, the American Rescue Plan Act of 2021, early Saturday. The Senate will now review the legislation.

Key averages rose in February on the back of a strong earnings season, positive news on the vaccine launch and hopes for another stimulus package.

The Dow was up 3.15% in February for its third positive month in four years. The S&P 500 was up 2.61% and the Nasdaq Composite was up nearly 1% for the fourth positive month in a row.

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Nasdaq rebounds from worst sell-off since October, Dow falls 100 factors

Dow futures jump 200 points on better-than-expected Goldman earnings, stimulus hopes

Traders on the floor of the New York Stock Exchange.

Source: The New York Stock Exchange

Tech stocks lifted the broader market higher in volatile trading on Friday, rebounding from heavy losses after a key inflation indicator showed tame price pressures.

The Nasdaq Composite rose 1.7% as Apple, Facebook and Microsoft each gained more than 2%. The tech-heavy benchmark swung wildly on Friday, even falling 0.7% at one point. The S&P 500 gained 0.6% while the Dow Jones Industrial Average fell 150 points, led by Salesforce and Chevron.

Some investors consoled themselves with the consumer spending price index, which pointed to subdued inflation in January. The PCE index, which the Federal Reserve is closely monitoring, rose 0.3% for the month, slightly above expectations of 0.2%. However, it rose only 1.5% year-on-year and was in line with Dow Jones estimates.

Government bond yields initially fell after the inflation data was released, but later bounced back from their lows. The 10-year yield was last trading near 1.5% after rising above 1.6% at one point on Thursday. The 10-year interest rate has increased more than 50 basis points since the start of the year, a sharp increase for a bond rate that is used as a benchmark for mortgage rates and auto loans.

“When the market starts to believe that the Fed has somehow lost control of the bond market, all of this tantrum idea will crop up,” Art Cashin, director of floor operations at UBS, said on CNBC’s “Squawk” on the street on Friday . “

Falling interest rates alarmed stock investors, bringing the Nasdaq Composite to its worst session since October the day before. The Dow fell 559 points and pulled back from a record high. The S&P 500 lost 2.5% while the tech-heavy Nasdaq lost 3.5%.

Economists and investment managers say the bond market will respond to positive economic conditions as vaccines roll out and GDP projections improve, which should benefit corporate earnings. The move could also signal inflation faster than expected.

The sheer pace of the surge has also dampened investor appetites for highly valued areas of the market. Higher interest rates reduce the value of future cash flows, so they can compress stock valuations. With Thursday’s 10-year yield spike, it was also above the S&P 500’s dividend yield, meaning stocks – considered riskier assets – have lost that fixed-payment premium over bonds.

“Until recently, market participants could digest the uptrend in long-term interest rates, but it appears that the next hike in interest rates will be a bigger bite,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. said in an email.

“Given where real returns have been, they were just too low given growth expectations, and it is likely that long-term real returns will continue to rise as economic data improves,” he added.

Popular big tech stocks like Alphabet, Facebook and Tesla, all of which started the year strong, fell 3.2%, 3.6% and 8%, respectively, on Thursday. Apple, one of the largest, cash-intensive companies in the world, saw its share price fall more than 15% last month.

Instead of technology, where companies borrow more on average, investors are investing money in so-called reopening businesses and buying stocks of companies that would benefit most from the introduction of the vaccine and a return to regular travel and hospitality trends.

Energy has increased 6.8% this week alone. This is by far the biggest winner as consumers around the world are expected to be driving and flying soon as they did before the Covid-19 pandemic. Industry and finance are the only other sectors in the Green Week so far.

The S&P 500 is down 2% so far this week while the Nasdaq is down 5%. The Dow Industrials is down 0.3%.

– CNBC’s Kevin Stankiewicz contributed to the coverage.

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Nasdaq falls greater than 1% as tech sell-off continues, Dow trades off low on Powell

Nasdaq falls more than 1% as tech sell-off continues, Dow trades off low on Powell

Tech stocks led the broader market down for a second day on Tuesday, amid higher interest rates and a rotation in stocks more linked to the economic rebound.

The Nasdaq Composite fell 1.4% for the first time since November 3, falling below its 50-day moving average, a key technical indicator. The S&P 500 fell 0.4% while the Dow Jones Industrial Average fell 70 points to its lows after 360 points.

Stocks rebounded from their lows after Federal Reserve Chairman Jerome Powell told Congress in his testimony that inflation is still “weak” and the economic outlook is still “highly uncertain”, which is what concerns a change in policy by the central bank.

“The economy is far from our employment and inflation targets, and it will likely take some time to make significant further progress,” said the Fed chief in prepared remarks for the Senate Banking Committee.

Fears of inflation have risen in recent weeks amid a sharp rise in bond yields as policy makers debated another round of economic relief. Investors fear that a price hike due to government incentives could force the central bank to raise short-term borrowing costs.

“The Fed is focused on employment and appears very poised to absorb higher inflation and excesses in the financial market, creating financial instability in hopes of getting there,” said Peter Boockvar, chief investment officer of the Bleakley Advisory Group , in a note. “But as can be seen at the long end of the yield curve, the markets have a say in this too and speak loudly. Hopefully the Fed officials will listen at some point.”

Tech stocks, the most vulnerable to higher interest rates, have sold out in the past few days. Investors also rushed to book profits on these pandemic winners, whose valuations have reached historically high levels.

Tesla was trading 4% lower after previously falling 13% after falling 9% in the previous session. Apple lost 1.7% after falling 3% on Monday. The iPhone maker’s stock is down about 11% over the past month.

Small caps also came under pressure as the Russell 2000 fell 1.9% on Tuesday and rose 6.5% in February. Those shabby value shares outpaced the S&P 500 in 2021 amid optimism about the vaccine launch and economic reopening.

“The sell-off of tech darlings and popular small caps could be interpreted as the beginning of market volatility,” said Chris Larkin, chief executive officer for trading and investing products at E-Trade. “It’s not to say that stocks have run their course, it’s more that cyclical sectors like energy and finance are more attractive as technology takes a back seat.”

The 10-year government bond yield, which has been rising steadily since early 2021, remained steady at 1.36% on Tuesday. So far this month the key rate has risen by an impressive 28 basis points. The 30-year yield hit a year-high of 2.2% on Monday. One basis point is 0.01%.

The losses incurred during Tuesday’s session contributed to growing divergence between key areas of the market. The tech-heavy Nasdaq Composite, which fell 2.5% on Monday, is down about 4% this week.

The Dow, which comprises a larger proportion of cyclical stocks, is down a far more modest 0.1% since Friday’s close as investors pick up names they believe will benefit from an economic rebound. Energy and finance – two of the best performing sectors this year – again supported the market on Tuesday.

Jonathan Golub, chief strategist at Credit Suisse in the US, believes cyclical stocks will take the market to new highs as the year progresses, driven by the upside in earnings and optimism about the economic reopening.

“Rising interest rates – a benefit to finance – and copper and oil prices – a boon to industry, energy and materials – further reinforce this favorable backdrop,” Golub said in a statement on Tuesday.

Credit Suisse increased its S&P 500 year-end target from 4,200 to 4,300. The new forecast corresponds to an 11.5% rally.