NEW YORK (dpa-AFX) – The rapid rise in yields on the bond market weighed on US technology stocks in particular on Thursday. Higher interest rates are causing problems for these shares, some of which are very highly valued, because they increase the financing costs of the strongly growth-oriented tech companies. In general, alternatives to equity investments could become more attractive if the current yield trend continues.
The tech-heavy NASDAQ 100 fell 1.71 percent to 12,976.73 points. The market-wide S&P 500, which contains many tech values, lost 0.37 percent to 3959.42 points. The leading index Dow Jones Industrial (Dow Jones 30 Industrial) but made the jump to a record high and was most recently 0.48 percent up at 33 173.26 points.
For some time now, bond yields have benefited from the trillion dollar economic stimulus from the US government and the progress made in the vaccination campaign against the coronavirus. On Wednesday, the US Federal Reserve (Fed) continued to react calmly to developments on the bond market. Keep the current very loose Monetary policy unchanged for appropriate.
The rising bond yields meanwhile raised hopes for better interest rate deals from banks. Goldman Sachs stocks rose by 2.5 percent in the Dow and JPMorgan (JPMorgan ChaseCo) at the top of the index by 3.4 percent. The shares of both finance houses were thus listed at record levels.
The experts of the Swiss bank Credit Suisse pointed out that now more members of the Fed’s monetary policy committee with a Rate hike expect as early as 2022. The number of those who expect an increase in 2023 has also grown. The Credit Suisse experts expect bond yields to continue to rise as the market adapts to the new signals.
At the bottom of the S&P 500, Dollar General’s shares fell around six percent. The department store chain had disappointed analysts’ expectations with its sales and earnings forecasts. In addition, earnings per share were surprisingly low in the fourth quarter./la/nas
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