NASDAQ Composite Posts Biggest Single-Day Sell-off in More than 2-Years

The technology sector was the biggest drag on both the S&P 500 Index and the Dow with the NASDAQ Composite posting is largest single day sell-off since June 24, 2016. The overall tech sector in the S&P 500 posted its worst day in seven years, falling 4.8 percent.
James Hyerczyk
Risk Ahead
Risk Ahead

The major U.S. stock indexes plunged on Wednesday with a steep drop in tech stock leading the broad-based markets lower. The catalyst behind the selling was concerns over rapidly rising interest rates. The move produced the worst sell-off since late January/early February.

In the cash market, the benchmark S&P 500 Index settled at 2785.68, down 94.66 or -3.29%. The blue chip Dow Jones Industrial Average closed at 25598.74, down 831.83 or -3.15% and the tech-driven NASDAQ Composite finished at 7426.65, down 311.37 or -4.02%.

The technology sector was the biggest drag on both the S&P 500 Index and the Dow with the NASDAQ Composite posting is largest single day sell-off since June 24, 2016. The overall tech sector in the S&P 500 posted its worst day in seven years, falling 4.8 percent.

Losses were wide spread among the sub-sectors. Individually, Intel and Microsoft lost more than 3.5 percent each. Shares of Amazon declined 6.2 percent, while Netflix dropped 8.4 percent. Facebook and Apple also declined more than 4 percent each.

So far this month, the S&P 500 Index is down 4.4 percent. The Dow is off by 3.3 percent and the NASDAQ Composite has lost about 7.5 percent.

The Dow also closed on its low, which likely means we’ll see follow-through selling on Thursday.

U.S. Treasury Markets

The stock market rout sent investors scurrying into U.S. government debt markets for safe-haven protection. The move drove Treasury yields lower. Investors were especially concerned earlier in the session when the yield on the benchmark two-year note hit 2.906 percent, its highest level since June 25, 2008. It ended the session at 2.852.

By the end of the session, the yield on the benchmark 10-year Treasury note was down to 3.174 percent, while the yield on the 30-year Treasury bond was at 3.362 percent.

U.S. Economic Reports

Stock and bond investors were spooked early in the session after the Labor Department reported that U.S. producer prices rose 0.2 percent in September, in line with expectations, but recovering from a weak performance in August.

Final demand prices had fallen 0.1 percent in August. In the 12 months through September, the producer price index rose 2.6 percent, slightly less than expected.

In other news, the Treasury Department auctioned $36 billion in 3-year notes a high yield of 2.989 percent. The Treasury Department also auctioned $23 billion in 10-year notes at a high yield of 3.225 percent.

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