The Nasdaq index fell more than 2% on Tuesday as investors sold mega-cap growth stocks amid valuation concerns, while keeping a close eye on the testimony of Federal Reserve Chairman Jerome Powell at the Congress.
Shares of Netflix Inc, Alphabet Inc, Microsoft Corp, Amazon.com Inc and Apple Inc slipped between 1.5% and 3.5% at the start of the session.
“There is definitely an assumption that inflation has crept in and bled and we’re starting to see some impact of that assumption on growth investing style,” said Keith Buchanan, portfolio manager at GlobAlt in Atlanta. .
“It’s hard to imagine a scenario in which there would be benefits to the larger market if these large-cap growth stocks don’t show the way.”
The Nasdaq fell to nearly a month low moments after the opening bell, and is now poised to post its biggest two-day loss since early September.
Seven of the top 11 sectors of the S&P 500 were trading in the red, with consumer discretionary, technology and communications services among the top three declines.
Powell said the US economic recovery remains “patchy and far from complete” and that it will be “some time” before the Fed considers changing the policies it has adopted to help the country regain full strength. employment.
The Fed chief appeared before the Senate Banking Committee for the first time since Democrats won the White House and control of both houses of Congress.
Value stocks, which should benefit from an economic rebound, outperformed growth stocks in February.
A drop in bitcoin hurt stocks at Tesla Inc, which recently invested $ 1.5 billion in cryptocurrency. The electric vehicle maker fell 6.6% and was expected to dip into the red for the year.
Cryptocurrency miners Riot Blockchain Inc and Marathon Patent Group Inc plunged more than 22.0% each, while bitcoin bank Silvergate Capital Corp slipped 22.7%.
At 10:18 a.m. ET, the Dow Jones Industrial Average was down 184.17 points, or 0.58%, to 31,337.52, the S&P 500 was down 40.54 points, or 1.05%, to 3,835.96, and the Nasdaq Composite was down 329.36 points, or 2.43%, to 13,203.69.
Home Depot Inc fell 5.8% after the home improvement retailer warned it was unable to predict how consumer spending will move this year.
Occidental Petroleum Corp fell 1.5% after the oil producer posted a larger-than-expected loss in the fourth quarter.
The declining issues outnumbered the proponents by a 3.20: 1 ratio on the NYSE and a 5.77: 1 ratio on the Nasdaq.
The S&P Index recorded 36 new 52-week highs and no new lows, while the Nasdaq recorded 109 new highs and 50 new lows.