Shares of U.S. technology fell on Monday as inflationary pressures mounted in the world’s largest economy as investors closed for further signs.
The blue-chip S&P 500 fell one percent, while the technology Nasdaq Composite slipped 2.6 percent in the two-day winning trend.
U.S. government bonds joined the sale, sending long-term yields higher. The 10-year Treasury note traded up 1.6 percent, up about 0.03 percentage points on the day.
Analysts expect data on Wednesday that the U.S. headline price in April was 3 times higher than the same period last year. 3. Percentage increased. A report released on Tuesday predicted that China’s factory gate prices, an early indicator of price pressures for importers in the West, would rise. More than a percent will jump.
Data released by the US Federal Reserve’s New York force on Monday suggests that consumers are also preparing themselves for higher prices. According to a recent survey, moderate inflation is expected for the coming year On the edge 3.4 percent in April, the highest level since September 2013.
Market systems have also risen in anticipation of inflation. A popular gauge, a five-year break-even rate, reached a 15-year high on Monday, up 2.7 percent.
There is Fed Committed As the American economy recovers from the epidemic, it is more comfortable with its 2 percent target of inflation. The central bank has indicated that it has no plans to reduce its 120 billion one-month bond purchase, which protects interest on Treasury yields, which could affect global borrowings.
Analysts, however, are concerned about the impact of a few months of strong inflation on bond prices and pushing yields higher. Rising bond yield Frustration Valuation of equities, especially long-term growth stocks that do not pay generous dividends in the technology sector.
“Will inflation make a good market for bonds and a technology sell-off? At the moment it’s a key market narrative, ”said Gregory Perdon, co-chief investment officer at Arbuthnath Latham.
“The Fed may say that inflation is temporary, until the economy resumes. . . After the complete reopening of the big economies in the United States and still we have a rising inflation when this line starts to become stale.
“One thought is that the reflection will be orderly and gentle,” said Yuko Takano, portfolio manager at Newton Investment Management, “when you have another camp that has seen U.S. inflation lose 4 or 5 percent, which can be very embarrassing. Market “.
Technology stocks have also been epidemic winners that some analysts suspect will make it harder to maintain their current level of earnings growth as lockdowns ease.
Nasdaq Assembled Its biggest firms as high as last month Report Strong first-quarter results. On Monday, Citigroup downgraded Facebook and Google parental alphabet shares to neutral from the second quarter of this year, saying “growth is likely to slow.” Shares of Facebook were up 4.1 percent on Monday and Alphabet was up 2 percent. 2. Percent decreased.
“Another cloud over the tech sector is U.S. tax reform,” said Marco Pirodini, head of U.S. equities at Amundi. US President Joe Biden Push In a move to allow multinationals to channel profits through low-tax jurisdictions for a lower corporate tax rate Threatens Business models of the world’s largest technology companies.
The dollar index, which measures the U.S. currency against the currencies of a group of trading partners, fell 0.1 percent. A report on Friday showed that the index fell 0.8 percent as the United States made one Too weak Expected 266,000 new jobs in April
Sterling rose one per cent to 1.44 after the UK Conservative Party won local elections and more coronavirus restrictions were expected. Lifting From 17th May
China’s renminbi, which is managed by the country’s central bank, touched a three-year high of every dollar.
Elsewhere, Brent crude futures traded at $ 68.23 a barrel. Europe’s Stokex 600 stock index rose 0.1 percent to end the session.