Drops in major technology companies have led to stocks falling sharply on Wall Street, downgrading major indexes to the recent rise in records they have set for the day before.
Markets were in shambles as investors tried to get a clearer picture of how well the economy is recovering from the epidemic and how the Federal Reserve will continue to facilitate lower interest rates. The central bank meets on Tuesday and will release its latest statement on Wednesday.
The S&P 500 fell 0.7% from 11:22 a.m. The rating index reached a new record on Monday. The Dow Jones Industrial Average fell by 147 points, or 0.4%, to 34,996 and the Nasdaq dropped by 1.7%.
Technology companies and a mix of consumer-focused companies were among the biggest losers. Microsoft fell 1.5% and Apple fell 1.4%. Both companies are set to report their latest results following the closure of the trade.
Investors have invested in seemingly insignificant sectors, including utilities and wholesale and retail companies.
They also bought bonds, sending yields on Treasury’s 10-year note down to 1.24% from 1.27% by the end of Monday. Long-term yields have declined in their sharp rise earlier this year, but Wall Street is still concerned about inflation.
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Wednesday’s report from the Fed could give investors more insight into the central bank’s concerns and when it could start reducing monthly bond purchases that have helped keep interest rates low.
Investors look at a combined fund from several large companies. UPS fell 8.5% after recent quarterly revenue did not meet analysts’ predictions. Wall Street has released seemingly solid results from several other companies. Tesla fell 2.9% and the industrial conglomerate 3M fell by 1%, although it reported strong financial results.
The stock market is “still in good shape,” said Terry Sandven, a major U.S. business strategist. Bank Wealth Management.
The Conference Board reported that consumer confidence reached a peak in July, marking the sixth straight month that the rate had risen. The International Monetary Fund has stated that it expects the global economy to grow by 6% this year, an astonishing pledge from 3.2% of contracts in the 2020 disease year.
Part of the uncertainty that runs through the markets is related to COVID-19 and its potential impact on recovery. The number of cases and hospitalizations has skyrocketed in some parts of the U.S. and around the world as the Delta variant spreads.
“The growth rate is being questioned because of the COVID-19 variety,” Sandven said. “There is some concern that speed may not be as strong.”
Wide decline in the U.S. follows further collapse in China, where legal pressure on various companies is affecting investors. Hong Kong’s Hang Seng lost 4.2% and Shanghai Composite lost 2.5%.
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