Banks and tech stocks lead another decline on Wall Street | national

Banks and big tech stocks lead another decline on Wall Street on Friday afternoon and every major index is on track for a weekly loss.

The S&P 500 fell 0.9% at 12:12 a.m. Eastern time. About 70% of the benchmark stocks were down. The Dow Jones Industrial Average lost 501 points, or 1.4%, to 35,395 and the Nasdaq was down 0.3%.

After pushing the S&P 500 to an all-time high last week, investors pulled money off the table as the Federal Reserve set to slow stimulus and fight inflation. The S&P 500 and the Nasdaq are both heading for their third weekly decline in the last four.

Tech stocks led the losses as Wall Street braces for a hike in interest rates. Microsoft fell 1.2% and Adobe lost 3%.

Large tech companies often have high valuations based on assumptions about their long-term profitability. These valuations are generally more acceptable to investors when interest rates remain low, but become less desirable when interest rates rise.

The Federal Reserve has announced plans to step up its reduction in monthly bond purchases, which has helped keep interest rates low. The policy change paves the way for the Fed to start raising rates next year.

“The cat is kind of out of the bag now and it looks like inflation is going to be something that is going to be more persistent into 2022,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Bond yields have fallen. The 10-year Treasury yield slipped to 1.39% from 1.42% Thursday night. This has taken a toll on banks, which rely on higher yields to charge more lucrative interest on loans. JPMorgan Chase fell 2.4%.

Losses were significant in all other sectors. A wide range of retailers, communications companies and industrial companies also fell.

Sectors deemed less risky held up better than the rest of the market. The losses were not so severe for real estate companies and utilities.

European markets were down and Asian markets mostly closed down overnight.

Wall Street is also assessing the potential impact of outbreak of coronavirus cases with the new omicron variant. Public health experts in Europe have called for greater precautions amid the latest wave.

Investors also envision heightened tensions between China and the United States amid an already strained global supply chain. In the United States, Congress approved legislation banning all imports from China’s Xinjiang region unless companies can prove that they were produced without forced labor.

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