Tech shares dropped for a second day on Tuesday in the face of higher interest rates and a rotation into stocks more linked to the economic recovery.
The Dow Jones Industrials dropped 124.45 points to 31,397.24.
The S&P 500 sank 27.33 points to 3,849.13,
The NASDAQ Composite slouched 254.24 points, or 1.9%, to 13,278.70, falling below its 50-day moving average, a key technical indicator, for the first time since Nov. 3.
Tech stocks, most vulnerable to higher interest rates, have sold off in recent days. Investors also rushed to book profits in these pandemic winners whose valuations have reached historically high levels.
Tesla traded 4% lower after sliding as much as 13% earlier, following a 9% decline in the previous session. Apple lost 1.7% after a 3% slide on Monday. The iPhone maker’s stock is down about 11% over the last month.
Stocks bounced off their lows after Fed Chair Jerome Powell’s prepared testimony to Congress said that inflation was “soft,” easing fears of a policy change by the central bank. Powell said price pressures remain mostly muted and the economic outlook is still “highly uncertain.”
Inflation fears have risen in recent weeks amid a sharp rise in bond yields as policymakers debate another round of economic relief as COVID cases decline. Investors fear that a spike in prices due to federal stimulus could force the central bank to raise short-term borrowing costs.
On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics. Gov. Andrew Cuomo said on Sunday that a New York resident has tested positive for the COVID-19 variant first identified in South Africa.
Prices for 10-Year Treasurys gained back ground, lowering yields to 1.35% from Monday’s 1.36%. Treasury prices and yields move in opposite directions.
Oil prices dipped 10 cents to $61.60 U.S. a barrel.
Gold prices slid $2.90 to $1,801.30