© Reuters.
By Yasin Ebrahim
Investing.com -- The Dow closed above session lows Monday, but the sea of red in tech stocks kept the rebound in check as the prospect of higher for longer interest rates weighed on sentiment.
The Dow Jones Industrial Average slipped 0.57%, or 184 points, the Nasdaq was down 1.02%, and the S&P 500 fell 0.65%,
The rout in technology from Friday continued into the new trading week, pressured by rising Treasury yields as investors price in higher for longer interest rates following Powell’s hawkish speech at Jackson.
Powell suggested that the central bank would be willing to keep interest rates higher and tolerate a slowing economy to bring down inflation. With the Fed’s September meeting just weeks away, incoming economic data including the fresh jobs and inflation will likely sway the Fed’s decision to hike rates by 0.50% or 0.75% next month.
“[S]hould August inflation show a second month of cooling price pressures, at least some Fed officials will likely be comfortable with a lesser 50bps hike…,” Stifel Economics said in a report.
Big tech names including Apple (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) fell about 1%.
Netflix (NASDAQ:NFLX), meanwhile, ended above the flatline as the streaming giant is reportedly weighing up the option to launch its ad-supported streaming services at a $7 to $9 monthly price, Bloomberg reported.
In the ongoing Twitter-Musk legal saga, meanwhile, Elon Musk reportedly subpoenaed a Twitter whistleblower, seeking documents to support allegations about fake and spam accounts on the social media giant's platform.
Semiconductor stocks also piled on the pressure as the mid-week revival seen last week – following quarterly results from Nvidia (NASDAQ:NVDA) – continued to unwind.
Monolithic Power Systems (NASDAQ:MPWR), ON Semiconductor (NASDAQ:ON) and Advanced Micro Devices (NASDAQ:AMD) were among the worst performing chip stocks.
Energy shrugged the broader market drop, driven by rising oil prices as investors continue to mull the prospect of major oil producers cutting output.
In deal news, Walmart (NYSE:WMT) closed about 1% higher after making a bid to buy the remaining 47% stake in South African retailer Massmart that it doesn’t already own for $377.6 million.
