NEW YORK (dpa-AFX) – After the long weekend due to the holiday, rising bond yields weighed heavily on the US stock markets on Tuesday. Investors are increasingly expecting interest rate hikes by the US Federal Reserve due to persistently high inflation. The yield on 10-year US bonds has risen to its highest level in two years – and at the same time weighs on stocks, particularly on the technology stocks on the Nasdaq. The banking sector also had to take a beating after the investment house Goldman Sachs disappointed with its quarterly report.
The leading US index Dow Jones Industrial fell by 1.55 percent to 35,356 points. The market-wide S&P 500 slipped 1.84 percent to 4577 points. The technology-heavy Nasdaq 100 lost even more with 2.26 percent to 15,258 points. Rising interest rates are a particular burden for high-growth companies, primarily in the technology sectors. The prices of chip manufacturers and their suppliers came under pressure.
In view of the high inflation in the USA, currently at seven percent, countermeasures by the Fed are becoming increasingly likely. Up to four rate hikes of 0.25 percentage points each are expected on the markets this year. Individual market participants can imagine even larger rate hikes. Otherwise, the Fed is threatened with a loss of credibility, some argue. Also on the horizon is the possibility that the Fed could soon scale back its balance sheet, which has ballooned to about $8.8 trillion.
Among individual stocks, shares of Activision Blizzard surged more than 25 percent. Microsoft wants to acquire the video game provider in a deal worth almost 70 billion dollars. The software giant behind the Xbox gaming console is thus securing popular games such as “Call of Duty”, “Overwatch” and “Candy Crush”. As a result, Microsoft shares fell by 2.1 percent. The shares of the game developer Electronic Arts, on the other hand, rose by 4.6 percent.
Investment bank Goldman Sachs suffered a slump in profits in the fourth quarter on the back of weaker trading revenues. In the final quarter of 2021, the financial group earned 13 percent less than a year ago. Analysts had expected a better result. Goldman’s stock, the Dow’s biggest loser, fell 8 percent, dragging other banks like JPMorgan and Morgan Stanley down 4.3 percent and 5.8 percent, respectively.
Looking at the papers from vaccine manufacturers, investors pulled the ripcord on Tuesday: Biontech, Curevac, Moderna and Novavax posted price losses of 7 to almost 14 percent. According to dealers, they suffered from the prospects of an improving situation worldwide in the corona pandemic./bek/stw
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