By Yasin Ebrahim
Investing.com -- The Dow slumped Monday, pressured by a sea of red in tech as Treasury yields continued to climb on fears that the Federal Reserve could spring a hawkish surprise later this week.
The Dow Jones Industrial Average slipped 1.9%, or 641 points, the Nasdaq was down 2.6%, and the S&P 500 fell 2.1%.
Tech stocks picked up from where they left off last week as rising Treasury yields, the enemy of stocks that have high valuations, piled on the pressure with just days to go until the Federal Reserve is expected to deliver fresh clues on monetary policy at its annual Jackson Hole symposium later this week.
“[A] more hawkish tone is likely to set the stage for a more aggressive rate move next month, while a softer or more dovish tone will expectedly reinvigorate hopes of a lesser sized move,” Stifel said in a note.
Google-parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Meta Platforms (NASDAQ:META) were down more than 2%.
Netflix (NASDAQ:NFLX) fell more than 6% after CFRA downgraded the stock to sell from hold and cut its price target on the stock to $238 from $345 on worries that the streaming giant’s earnings will decline in the second half of the year.
Ford Motor (NYSE:F), meanwhile, dragged consumer stocks lower as the automaker was ordered to pay $1.7 billion to the family of Voncile and Melvin Hill, who were killed in a fatal rollover of an F-250 pickup truck. The automaker also said it would slash 3,000 jobs in the U.S. and Canada.
Energy was the relatively outperforming sector on the day, down about 0.2%, as oil prices recovered losses after Saudi energy minister touted the prospect of major oil producers cutting costs to ensure that oil futures prices reflect the current supply and demand fundamentals.
APA (NASDAQ:APA) and Coterra Energy (NYSE:CTRA) were the major gainers, while Occidental Petroleum (NYSE:OXY) closed 3.2% lower even as reports suggested that Warren Buffett’s Berkshire Hathaway isn’t considering a takeover despite increasing his stake to 50% in the oil major.
In other news, meme-related stocks including GameStop (NYSE:GME), Bed Bath & Beyond Inc (NASDAQ:BBBY), and AMC Entertainment Holdings Inc (NYSE:AMC) were also under pressure, with the latter down nearly 42% as the company’s new preferred share class begin trading.