After brief panic at the hands of a forced multibillion-dollar margin call, markets on Tuesday are back to focusing on rising Treasury yields that are unraveling the past year’s meteoric gains, with tech stocks once again underperforming, while buzzy meme stock GameStop continues its unlikely surge.
Shortly after the market open, the Dow Jones Industrial Average, which closed at a record high Monday, is ticking down 47 points, or 0.1%, while the S&P 500 slips 0.4%, and the tech-heavy Nasdaq falls 0.8%.
Fueling the weakness in tech stocks, yields on the 10-year Treasury are back on the rise, climbing four basis points Tuesday morning ahead of President Joe Biden’s Thursday infrastructure announcement, which is sure to shore up the economic recovery—and hike up government spending.
Big banks Credit Suisse and Nomura, which both warned of “significant” losses as a result of Friday’s block-trading mayhem, are dropping another 3% and 2%, bringing their total losses since Friday to a staggering 15% and 16%, respectively.
Oil prices, on the other hand, are continuing to fall on renewed demand concerns, with the price of U.S. benchmark West Texas Intermediate falling 1.4% and pushing oil stocks Occidental Petroleum and Schlumberger NV down about 2% each.
Meanwhile, recently booming GameStop announced another executive hire, appointing Amazon director Elliott Wilke to the newly created role of chief growth officer as the company bulks up its top ranks with tech veterans; shares are up 4% Tuesday and nearly 900% this year.
On the earnings front, McCormick & Co. shares are heading up gains in the S&P, climbing 4% after the food manufacturer posted better-than-expected first-quarter sales of nearly $1.5 billion, 22% more than one year earlier thanks to consumers cooking more at home during the pandemic.