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Stocks fell drastically in morning trading on Wall Street on Tuesday as investors review the latest batch of corporate earnings and continue to watch for rising inflation and the virus pandemic.
The S&P 500 fell 1.3 percent as of 10:30 a.m. in the East. The Dow Jones Industrial Average fell 534 points, or 1.5%, to 35,377 and the Nasdaq fell 1.2%.
Technology stocks and banks dragged the market down. Chipmaker Nvidia fell 2.3% and JPMorgan Chase fell 3.5%.
Goldman Sachs fell 7.7% after the investment bank said its fourth-quarter profit fell 13% year-on-year, largely due to the bank’s readiness to pay higher compensation packages to staff.
The losses were extensive. More than 90% of shares in the S&P 500 fell. The benchmark index is also emerging from a two-week loss as investors become more cautious in the face of rising inflation and the continued threat of the virus pandemic.
Major tech stocks, which have had a huge impact on the S&P 500 due to their high valuations, have been putting heavy pressure on the market throughout January. Investors are shifting money in anticipation of rising interest rates, which tend to make expensive technology stocks less attractive.
The Federal Reserve has stepped up its plan to cut bond purchases and is considering raising interest rates sooner and more often than Wall Street expected less than a year ago.
Bond yields soared. The 10-year Treasury yield rose to 1.84% from 1.77% on Friday.
Energy stocks were one of the bright spots in the market, gaining ground on supply fears after the attack on an oil facility in the capital of the United Arab Emirates. US crude oil prices rose 1.6% and Exxon Mobil rose 2.5%.
Activision Blizzard rose 27.5% on news of a blockbuster deal. Dropping 0.5%, Microsoft is buying the makers of games such as “Call of Duty” and “Candy Crush” for $ 68.7 billion.
Investors have a busy week of earnings reports ahead of them. The main focus will be on how companies in different industries are tackling persistent supply chain issues. Many companies have already warned of the impact on their finances and operations, although consumer goods prices were raised to offset the impact.
Bank of America, UnitedHealth and United Airlines will announce the results on Wednesday. American Airlines, Union Pacific and Netflix will announce their results on Thursday.
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