© Reuters. FILE PHOTO: People are seen on Wall Street in front of the New York Stock Exchange (NYSE) in New York City, the United States, March 19, 2021. REUTERS / Brendan McDermid / File Photo
From Medha Singh
(Reuters) – Wall Street major indices should open significantly lower on Tuesday, signaling another day of losses for high-valued technology-related stocks on inflation concerns.
The outperformers of 2020, Apple (NASDAQ :), Facebook Inc. (NASDAQ :), Amazon.com Inc (NASDAQ :), Netflix Inc (NASDAQ :), and Google Parent Alphabet (NASDAQ 🙂 Inc fell 1.7% to 2.8% in premarket trading, while Tesla (NASDAQ: ) Inc almost fell 8%.
Since the beginning of May, the 10-person NYSE FANG + TM index, which includes Tesla and the FAANG core group, Alibaba (NYSE 🙂 and Twitter Inc. (NYSE 🙂 lost more than $ 442 billion in market value on May 10th.
The benchmark's 10-year US Treasury note yield rose 1.604% on Wednesday ahead of the consumer price index report. Investors feared that a strong stock could cause the Federal Reserve to change its ultra-loose monetary policy. (US/)
"We saw commodity prices spike, economic data was very strong, and interest rate spikes really put pressure on the technology complex," said Dan Eye, director of asset allocation and stock analysis at Fort Pitt Capital Group.
"If you value a high-growth company by its ten years of profits, those future profits are worth much less today with higher inflation rates."
In a late reversal of Monday's session, fluctuations in inflation drove investors from growth stocks to cyclicals, which benefited the most as the economy reopened, resulting in its worst day in nearly eight weeks.
At 8:29 a.m. CET, 297 points or 0.86%, 53.75 points or 1.28% and 265 points or 1.98% fell.
Simon Property Group Inc (NYSE 🙂 fell 3.7% after the U.S. mall operator said it doesn't expect a return to 2019 occupancy levels until next year or 2023 as it plans to play hardball in lease negotiations with tenants.
L Brands Inc (NYSE 🙂 fell 3% after the company announced it would split into two publicly traded companies, Bath & Body Works and Victoria's Secret, after the retailer opted not to sell the lingerie brand would have.
Energy stocks like Occidental Petroleum Corp (NYSE :), APA Corp, and Chevron Corp (NYSE 🙂 fell between 1.3% and 4% as oil prices fell sharply. (OR)
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