Stocks Drop as Inflation, Rates, Virus Stir Alarm: Markets Wrap

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(Bloomberg) -- Stocks were connected gait for their longest losing streak since September arsenic prospects for higher rates and ostentation unsettle planetary markets. Some firm warnings astir the antagonistic impacts of the omicron coronavirus variant besides soured sentiment.

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The S&P 500 headed toward its 5th consecutive drop, portion the tech-heavy Nasdaq 100 underperformed large benchmarks. Treasury 10-year yields roseate to astir 1.8%. Lululemon Athletica Inc. sank arsenic the shaper of yoga pants said omicron was constraining its operations. Torrid Holdings Inc. plunged aft the plus-size women’s covering retailer chopped its income forecast arsenic the variant caused disruptions to its workforce.

Some of the most-speculative pockets of the marketplace bore the brunt of the selling. Cathie Wood’s flagship ARK Innovation exchange-traded money slid arsenic overmuch arsenic 5.1%, bringing its five-day rout past 17%. GameStop Corp. and AMC Entertainment Holdings Inc. helped thrust a handbasket of alleged meme shares to the lowest level successful astir a year. Bitcoin fell for the 5th clip successful six sessions, putting it connected gait for its worst commencement to a twelvemonth since the earliest days of the integer alternate to money.

Markets are facing higher volatility arsenic the pandemic liquidity that has pushed equities to grounds highs is withdrawn. The Federal Reserve volition apt rise rates 4 times this twelvemonth and volition commencement its balance-sheet runoff process successful July, if not earlier, according to Goldman Sachs Group Inc. A cardinal measurement of U.S. ostentation -- acceptable to beryllium released Wednesday -- is anticipated to person accrued further successful December, putting further unit connected the cardinal slope to tighten policy.

Read: Powell Heads for Senate Vetting Punctuated by Inflation Urgency

“The information that the Fed mightiness beryllium looking to tackle ostentation caput connected and follow an adjacent more-hawkish attack has caught the marketplace a small spot disconnected guard,” said Fiona Cincotta, elder fiscal markets expert astatine City Index. “That’s being reflected successful those high-growth tech stocks falling again.”

In the past 3 decades, determination person been 4 chiseled periods of rate-hike cycles by the Fed. On average, technology, which has been nether unit amid prospects of earlier and faster complaint increases, is among the best-performing sectors during those cycles, according to Strategas Securities.

Here are immoderate cardinal events this week:

  • Fed Chair Jerome Powell’s confirmation proceeding successful the Senate Banking Committee connected Tuesday.

  • Kansas City Fed President Esther George and St. Louis Fed President James Bullard sermon the economical and monetary argumentation outlook connected Tuesday.

  • EIA crude lipid inventory study connected Wednesday.

  • China PPI, CPI connected Wednesday.

  • U.S. CPI, Fed Beige Book connected Wednesday.

  • U.S. archetypal jobless claims, PPI connected Thursday.

  • U.S. Senate Banking Committee proceeding for Lael Brainard, nominated arsenic Fed vice-chair connected Thursday.

  • Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker,

  • Chicago Fed President Charles Evans talk connected Thursday.

  • Bank of Korea argumentation determination and briefing connected Friday.

  • Wells Fargo, Citigroup, JPMorgan owed to study net connected Friday.

  • U.S. concern inventories, concern production, University of Michigan user sentiment, retail income connected Friday.

  • New York Fed President John Williams speaks Friday.

For much marketplace analysis, work our MLIV blog.

Some of the main moves successful markets:


  • The S&P 500 fell 1.4% arsenic of 11:19 a.m. New York time

  • The Nasdaq 100 fell 1.9%

  • The Dow Jones Industrial Average fell 1.2%

  • The Stoxx Europe 600 fell 1.4%

  • The MSCI World scale fell 1.1%


  • The Bloomberg Dollar Spot Index roseate 0.2%

  • The euro fell 0.3% to $1.1327

  • The British lb fell 0.2% to $1.3566

  • The Japanese yen roseate 0.4% to 115.15 per dollar


  • The output connected 10-year Treasuries precocious 3 ground points to 1.79%

  • Germany’s 10-year output was small changed astatine -0.04%

  • Britain’s 10-year output precocious 1 ground constituent to 1.19%


  • West Texas Intermediate crude fell 0.2% to $78.71 a barrel

  • Gold futures fell 0.2% to $1,794.30 an ounce

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