Stocks Are Dropping Thursday after the 10-Year Treasury Yield Topped 2% Due to Surging Inflation

Tiger Newspress2022-02-10

U.S. stock futures retreated on Thursday morning after a key inflation report showed a faster-than-expected rise in prices.

Futures for the tech-heavy Nasdaq 100 fell nearly 2%, while S&P 500 futures dipped 1.3%. Dow futures were down 248 points, or 0.7%.

Thursday’s consumer price index report showed a year-over-year rise of 7.5%, hotter than expected and the largest reading since 1982.

Investors were focused on the report as a clue to how aggressive the Federal Reserve will be to curb inflation. The 10-year Treasury yield jumped to 2% after the report, after being at 1.51% at the end of December.

“With another surprise jump in inflation in January, markets continue to be concerned about an aggressive Fed. While things may start getting better from here, market anxiety about potential Fed overtightening won’t go away until there are clear signs inflation is coming under control,” said Barry Gilbert, asset allocation strategist for LPL Financial.

Big Tech stocks moved lower after the report, with shares of Apple, Amazon and Microsoft all shedding more than 1%.

“We’ve got discretionary, communications services and tech all lower. That makes sense because every time you get an uptick in interest rates, tech sells off,” said Randy Frederick of Charles Schwab.

Bank stocks, however, moved higher as they are more likely to benefit from higher interest rates. JPMorgan and Wells Fargo each added more than 1% in premarket trading.

A solid batch of earnings reports helped to limit the losses for the market on Thursday.

Shares of Dow 30 component Disney jumped 7% in premarket trading after the company reported a quarterly earnings beat and a doubling of revenue from its parks, experiences and consumer products division. Uber gained 4.8% in extended trading after reporting a revenue beat and a bounce back from omicron-induced challenges.

Elsewhere, Twitter shares also rose premarket, jumping 2.6% after the company announced a $4 billion stock buyback program. Coca-Cola shares were up nearly 1% after the soft drink giant reported earnings and revenue that beat Wall Street estimates.

Expedia, Affirm and Zillow will report earnings after the closing bell.

In other economic news, weekly jobless claims came in at 223,000, slightly below expectations.

Thursday’s trading moves follow a broad rally on Wednesday. The Nasdaq rose for a second straight day, gaining 2%.

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Comments

LimLS
2022-02-11
LimLS
Guess the rotation away from tech stock will intensify. The mega caps with strong earnings and reasonable PE will be less affected. But growth stocks with high PE will have to watch out. In times like this, it's better to be invested in safer stocks, rather than chasing the growth stock. Money is hard to earn so every investment really need to be clearly think through. Not worth it to chase for extra few % gain while taking big risks. At least not in a volatile period.
etan000
2022-02-11
etan000
Ok
Jess261
2022-02-11
Jess261
Okay
SCLIEW
2022-02-11
SCLIEW
666
PearlynCSY
2022-02-11
PearlynCSY
Dow slides 500 points as yields spike following red-hot inflation report. Thursday’s consumer price index report showed a year-over-year rise of 7.5%, hotter than expected and the largest gain since 1982. The 10-year Treasury yield jumped above 2% after starting the year at 1.51%. Now everyone realises the Biden Administration is telling the true for claiming inflation is transitory since taking office a year ago.
robot1234
2022-02-11
robot1234
Inflation surges 7.5% on an annual basis, even more than expected and highest since 1982. This is a confirmation signal the Biden Administration is caught flat-footed and far behind the inflation curve. Going forward, US Stock Markets will be hit by a triple whammy of persistent high inflation, interest rate hikes and Fed tapering her bloated $9 trillion balance sheet.