The New York Stock Exchange fell heavily on Thursday in a market increasingly worried about the pace of the 10-year US Treasury bill rate, which hit a one-year high.
The Nasdaq, with strong technological coloring, sank 3.52% to 13,119.43 points, its worst session since October.
The Dow Jones lost 1.75% to 31,402.01 points and the S&P 500 extended index fell 2.49% to 3,829.34 points.
“The rapid rise in bond yields seems to be troubling investors while putting pressure on growth-oriented sectors, particularly that of information technology,” said experts at Charles Schwab.
The 10-year rate on US government bonds hit a peak of 1.61% on Thursday, a level not seen since February 2020. It then fell back a bit, but was still moving around 1.50% in end of the day.
The 30-year rate also rose to 2.28%.
Bond yields move in the opposite direction to prices. A rise in rates is therefore synonymous with a significant movement in the sale of Treasury bills.
Investors generally part with their bonds when they anticipate a hike in Federal Reserve (Fed) key rates.
If the boss of the Fed, Jerome Powell, repeated this week that he did not intend to touch the current level of the rent of the money, included in a range between 0% and 0.25%, many market participants believe that the manager may be forced to change his approach if the economy overheats.
A rapid rise in prices, caused by a strong upturn in growth, could indeed push the US central bank to raise its key rates in order to curb inflation.
Directly affected by a rise in lending rates, which could slow their growth and their ability to invest, the American tech pillars suffered Thursday on Wall Street: Apple, Amazon, Alphabet and Facebook all fell by more than 3 %.
Among the other values of the day, GameStop rose 19% after already seeing its price more than double the day before.
The progress of the video game retailer subsided at the end of the session, but the group still benefited from a surge in speculative purchases, which recalls the movements observed at the end of January on Wall Street.
Twitter rose 3.71% after posting its goal of doubling its revenues by the end of 2023 and counting 315 million daily active users known as “monetizable”.
Pfizer gained 1.99% after a massive study in Israel showing the company’s vaccine was 94% effective against symptomatic cases of Covid-19.
Moderna took 2.48% after significantly exceeding expectations for its quarterly revenue and forecasting revenue of more than $ 18 billion this year from the sale of its Covid-19 vaccine.
dho / lo / esp