© Reuters.
By Yasin Ebrahim
Investing.com – The S&P 500 gave up intraday gains Monday, driven by a slump in energy and technology as investors weighed the ongoing Russia-Ukraine war and the start of the Federal Reserve rate hikes expected later this week.
The S&P 500 fell 0.6%, the Dow Jones Industrial Average gained 0.1%, or 36 points, the Nasdaq fell 1.6%.
Energy stocks fell 3%, pressured by a more than 6% slump in oil prices amid easing fears of supply shortages after Russia and Ukraine resumed talks on a ceasefire agreement that could pave the way to ending the war.
Russia and Ukraine are set to resume talks on Tuesday after little progress was made on talks earlier Monday.
Sentiment on energy was also soured by downgrades from Morgan Stanley on oil majors including Occidental Petroleum (NYSE:OXY) and Chevron (NYSE:CVX) to equal-weight from overweight, citing valuation concerns.
Tech, meanwhile, remained in crosshairs as investors continue to shun the sector, as Treasury yields surged in an anticipation of the first Federal Reserve rate hike in three years later this week.
“After a 25 basis point hike at the March meeting, we see the Fed delivering an additional five 25 basis point rate hikes this year, followed by four hikes in 2023 to end the year at 2.625%,” Morgan Stanley said in a note.
Apple (NASDAQ:AAPL) led the move lower down 2% amid some worries about a shortage of supplies after Foxxconn, one of its major suppliers China, said it would suspend operations in Shenzhen following a rise in Covid-19 cases.
Alphabet (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) were also 2% lower, while Facebooked bucked the trend up less than 1%.
But not all sectors are vulnerable to rising rates. Financials started the week on the front foot as investors bet that banks are set to benefit from a rising interest rates environment.
Northern Trust (NASDAQ:NTRS), Charles Schwab (NYSE:SCHW), Cincinnati Financial (NASDAQ:CINF), with the latter up more than 4%.
In other news, Ford (NYSE:F) slipped 2% after Jefferies cut its price target on the automaker to $18 from $20 amid concerns that rising input costs and supply-chain woes will weigh on growth.
