Down for a sixth-straight day on Tuesday, the S&P 500 is extending its longest losing streak since the market crash in February as technology stocks continue to plunge amid rising bond yields–a bearish indicator for investors worried the stock market’s booming rally could come to an end.
Shortly after the market open, the Dow Jones industrial average, which has remained roughly flat near peak levels in recent days, ticked up 24 points, or less than 0.1%, while the S&P 500 slipped for a sixth-straight day, falling 0.5%, while the tech-heavy Nasdaq sank 1.8%.
Big tech stocks continued to lead weakness in the market, with Tesla plunging 5%, while Amazon, Apple, Netflix and Alphabet all slip about 2%.
Hard-hit cyclical stocks, meanwhile, are heading up gains, with entertainment giant Live Nation climbing 5% and energy firms Marathon Oil, Pioneer Natural and ConocoPhillips all up nearly 5%.
Shares of special-purpose acquisition company Churchill Capital IV are plunging 34% after an announced acquisition of electric-carmaker Lucid Motors that values the Tesla rival at an estimated $24 billion.
On the earnings front, Home Depot shares are falling 3% after the home-improvement company posted fourth-quarter results that beat analyst expectations but are in line with recently booming growth during the pandemic.
Yields on the 10-year Treasury–a bellwether of investor sentiment that moves inversely with stocks–continued to edge higher, climbing 5 basis points Tuesday to a one-year high of 1.376%.
“It’s more of the same so far this morning as Treasury yields bleed higher–albeit only slightly–while the Nasdaq gets hit hard and reopening stocks surge,” Vital Knowledge Media Founder Adam Crisafulli said Tuesday. “The price action in the last 24 hours has been relatively orderly with most calling the tech slump simply a matter of time. The reopening equity strength may be getting a bit overheated, but positioning in these names remains light, which will help fuel further upside.”
What To Watch For
Federal Reserve Chair Jerome Powell is slated to testify before the Senate on Tuesday morning. He’s expected to echo sentiments from European Central Bank President Christine Lagarde, who signaled on Monday that rising yields were becoming a concern.
The Nasdaq is down about 5% from an all-time high on February 12. That’s the same day the S&P hit its latest high. It’s down about 2% since.
Home prices surged 10.4% in December–the largest gain since 2014, according to data from S&P CoreLogic Case-Shiller released Tuesday.