Traders work on the floor of the New York Stock Exchange (NYSE) on July 25, 2022 in New York.
Spencer Platt | Getty Images
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Markets had their worst day in three months. Maybe reality is catching up with them.
What you need to know today
- FOR Technology stocks have outperformed the broader market this year. But “real leadership is unprofitable junk Nasdaq“This is risky for investors to own,” said Josh Brown, CEO of Ritholtz Wealth Management.
It was a terrible day for the markets. Let’s get straight to the numbers: The Dow Jones Industrial Average fell 2.06% and the S&P 500 lost 2%. It was the worst day for both indexes since December 15. The Nasdaq Composite Index fared even worse, losing 2.5%. The recent outperformance of growth stocks on the Nasdaq could be just a mirage. “Overall, we remain the least preferred in the technology sector, particularly in the US,” UBS said.
US markets were weighed down by lackluster outlooks from Walmart and Home Depot. Walmart’s soft outlook suggests consumers are feeling pressure from rising prices. Meanwhile, Home Depot’s struggles suggest the housing market is still cracking under rising interest rates. That pessimism was reflected in the S&P — consumer stocks posted the biggest drop of 3.3%.
Some analysts believe stocks face the reality of higher interest rates — a scenario the bond market has priced in. On Tuesday, the 10-year Treasury yield climbed to 3.9%, while the two-year rate rose to 4.7%, figures not available. since November. “I think it’s the equity markets that have finally caught up to what the Treasury markets have been saying for weeks,” said B. Riley Wealth chief market strategist Art Hogan. When the Federal Reserve minutes are released on Wednesday, markets will also find out what central bankers have been saying — and perhaps react accordingly for the first time this year.
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