Wall Street Falls as 10-Year Treasury Yields Hit 5.25% and Tech Stocks Slip
Wall Street finished lower on Monday as the Dow fell 0.7% and bond yields hit 19-year highs at 5.25%. Meta dropped 4.8% on enterprise AI plans while Nvidia rose 1.7% on buybacks.
Wall Street closed lower on Monday, with the Dow Jones dropping roughly 0.7%, the S&P 500 declining by about 0.8%, and the Nasdaq weakening by nearly 0.9%.
Meta fell by about 4.8% following a week in which it surged by nearly 13%. Alongside profit-taking, investors examined the company's announcement of entering the enterprise software sector via an AI platform for businesses. The announcement was accompanied by a sharp upheaval in another stock: MongoDB plummeted by roughly 18.5% following its CEO's move to manage Meta's new venture.
Nvidia presented an opposite picture. The chipmaker's stock rose by about 1.7% after announcing a $150 billion expansion of its share buyback program. The rise stood out particularly on a day of broad weakness in chip stocks: Intel lost about 5.7%, Arm dropped by roughly 8.7%, and Marvell by 3.8%. Israel's Wix also fell by about 5.7%, despite announcing a new product from Base44, the company it acquired last year.
Market pressure also stemmed from the bond market. The yield on the 10-year US Treasury note climbed to about 5.25%, a level not seen in roughly 19 years. As yields rise, investors are re-evaluating the price they are willing to pay for companies' future earnings, particularly in growth stocks. Concurrently, high oil prices add to concerns over persistent inflationary pressures.
An additional metric illustrates the market's weakness beyond the major indices: according to the review, this marks the ninth consecutive day in which the number of S&P 500 stocks hitting annual lows exceeds those hitting annual highs. Consequently, even after a close where indices fell by less than a percent, investors are questioning how many stocks can sustain the market against rising yields.
