US stocks tumble as Powell warns of more inflation and Treasury yields hit 3-month high
- US stocks tumbled on Tuesday amid an ongoing spike in US Treasury yields, which hurt mega-cap tech stocks.
- Fed Chairman Jerome Powell is set to testify to Congress that a jump in inflation could last longer than expected.
- The 10-year US Treasury yield surged to a three-month high of more than 1.50% on Tuesday.
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US stocks fell on Tuesday amid a spike in US Treasury yields and ahead of Fed Chairman Jerome Powell's scheduled testimony to Congress.
Powell will tell Congress in prepared remarks that the drivers behind the recent jump in inflation may last longer than expected. Those drivers include disruptions in the global supply chain and a tightened labor market.
Mega-cap tech stocks like Apple and Microsoft extended their two day decline to more than 2% as US Treasury yields surged. The 10-Year US Treasury yield hit a three-month high of 1.53%.
Here's where US indexes stood shortly after the 9:30 a.m. ET open on Tuesday:
- S&P 500: 4,406.70, down 0.82%
- Dow Jones Industrial Average: 34,756.35, down 0.32% (113.02 points)
- Nasdaq Composite: 14,767.61, down 1.34%
Oil prices soared above $80 for the first time in three years as a shortage in natural gas spurs demand for the commodity.
Goldman Sachs cut its China GDP forecast for 2021 to 7.8% from 8.7%, warning that the economy's energy crunch represents another growth shock.
Ford jumped as much as 5% after the company re-upped its commitment to electric vehicles via the announcement of four new battery and electric vehicle plants that will cost more than $11 billion.
Alibaba said it will block sales of crypto mining equipment starting next month to comply with China's ongoing crackdown against cryptocurrencies.
West Texas Intermediate crude oil jumped as much as 0.95%, to $76.17 per barrel. Brent crude, oil's international benchmark, jumped 0.62%, to $80.02 per barrel.
Gold fell as much as 0.97%, to $1,735.00 per ounce.