Stocks fell broadly in morning trading on Wall Street Monday, and bond yields continued rising as investors anticipated moves by the Federal Reserve to raise interest rates.
The S&P 500 fell 1.8%, the Dow Jones Industrial Average fell 1.5%, and the tech-heavy Nasdaq fell 2.3%.
Technology stocks led the slide.
Take-Two Interactive, the maker of “Grand Theft Auto” and other video games, plunged after announcing a deal to buy Zynga, maker of “Words With Friends” and “Farmville.”
In addition, CNN reports that the so-called “FAANG Stocks” — the acronym used to describe the normally-reliable tech companies of Meta Platforms (the parent company of Facebook), Apple, Amazon, Netflix and Google owner Alphabet — continued a recent slide Monday. Microsoft, computer chip maker Nvidia, and Elon Musk’s Tesla have also experienced losses since the calendar turned to 2022.
The dip in tech stocks also comes investors try to anticipate how and when the Federal Reserve will raise interest rates. The Fed has already indicated that rates will go up later this year.
According to The Associated Press, higher interest rates make the stocks of expensive tech companies and other pricey growth companies less attractive to investors, which is why the sector has been slipping while bond yields rise.
The yield on the 10-year Treasury rose to 1.80% from 1.76% late Friday.
Utilities and other sectors considered less risky, like utilities, financial stocks and household goods makers, held up better than most of the market.