Bond yields hit new highs as tech stocks slide; investors turn to banks and earnings for stability
On Monday, the Dow Jones Industrial Average rose, surpassing other market indices, as investors shifted focus from technology to non-tech stocks.
The Nasdaq Composite, meanwhile, fell, reflecting ongoing sell-offs in major tech companies that have underpinned the bull market, according to CNBC.
The 30-stock Dow gained 358.67 points, or 0.86 percent, closing at 42,297.12. Investors moved into shares of Caterpillar, JPMorgan, and UnitedHealth, boosting the index.
In contrast, the tech-heavy Nasdaq Composite declined 0.38 percent to 19,088.10, while the S&P 5400 saw a modest gain of 0.16 percent, ending at 5,836.22. All three indices have fallen over the past two weeks, with tech shares being the primary driver of the decline.
Technology companies Palantir and Nvidia, both key players in the recent bull market, experienced notable losses. Palantir dropped more than 3 percent, and Nvidia shed nearly 2 percent on Monday.
These declines build on their prior week’s losses, with Nvidia falling almost 6 percent and Palantir losing over 15 percent. Apple and Micron also recorded losses during the session.
While technology stocks struggled, the energy sector outperformed, gaining more than 2 percent as oil prices rose. The health care and materials sectors also posted gains.
Rising bond yields further pressured growth-oriented stocks. The 10-year Treasury yield reached 4.79 percent, marking its highest level since November 2023.
This follows Friday’s surge in yields, driven by a stronger-than-expected US jobs report that cast doubt on the likelihood of further interest rate cuts by the Federal Reserve.
Adam Turnquist, chief technical strategist at LPL Financial, remarked on the market’s challenges, stating, “With the 10-year yield potentially getting to 5 percent, I think it’s going to be very hard for the equity market to really gain any meaningful traction here until there’s — at minimum — stability in interest rates.”
He added that a bear market is unlikely, though a short-term correction remains a possibility.
As investors seek market stability, attention has turned to the fourth-quarter earnings season.
Reports from major US banks, including Citigroup, Goldman Sachs, and JPMorgan Chase, are expected on Wednesday. Morgan Stanley and Bank of America will release their earnings on Thursday.
This week’s US economic data includes the release of the December consumer price index on Wednesday morning. Additionally, December’s producer price index is scheduled for publication on Tuesday.
