US stocks resume sell-off as tech megacaps slump weigh on indexes
US treasury secretary Scott Bessent said that while the underlying economy is healthy and there is no reason for the US to see a recession, he cannot guarantee that it will not happen. File Picture: Ben Curtis/AP
The S&P 500 Index fell more than 1% in New York. The tech-heavy Nasdaq 100 Index declined 1.7%. The blue-chip Dow Jones Industrial Average shed 0.4%.
The US Fed is expected to hold interest rates steady on Wednesday, and its quarterly dot plot should give investors more insight into the outlook for the US economy.
Some investors are hoping that last week’s rapid stock market sell-off prompts a Fed put, but Bloomberg economists do not expect any sort of reassurance at this week’s meeting.
Traders are also monitoring recent developments in the Middle East, after Israel launched a series of airstrikes in Gaza, breaking an almost-two-month ceasefire in the region.
Meanwhile, Russian president Vladimir Putin is demanding a suspension of all weapons deliveries to Ukraine during a ceasefire proposed by US counterpart Donald Trump.
“Because investors’ favourite stocks — and those with a heavy weighting in the index — have suffered so much, it’s likely impacting investor sentiment disproportionately versus an otherwise more orderly decline,” Bret Kenwell, a US investment analyst at eToro, wrote in a note to clients.
Uncertainty over geopolitics and the Fed’s interest rate decision overshadowed better than expected factory output data that eased concern of weakening manufacturing.
Other data released on Tuesday showed a rebound in US home construction.
Adding to the market’s dented sentiment, US treasury secretary Scott Bessent said that while the underlying economy is healthy and there is no reason for the US to see a recession, he cannot guarantee that it will not happen.
- Bloomberg
