Stock market today: tech stocks fall as U.S. political pressures weigh in

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The stock market was down on Monday as US political friction dampened investor sentiment. Several risks remain in October, which can be a historically difficult month for stocks.

In the morning exchanges, the

Dow Jones Industrial Average
was down 203 points, or 0.6%, after the index rose 482 points on Friday to close at 34,326.

S&P 500
and the

Nasdaq Composite
fell by 1% and 1.7% respectively.

A set of familiar themes weighed on investor sentiment on Monday. Analysts noted that the December deadline for the US debt ceiling and the lingering political conflict over the $ 1 trillion infrastructure bill and $ 3.5 trillion reconciliation plan had muddied the waters. .

“In October, the rough waters are likely to continue given the ongoing political wrangling and the debt ceiling drama,” wrote Keith Lerner, co-chief investment officer at Truist.

Technology stocks were particularly hard hit by the rise in bond yields. Rising yields often mean that investors expect inflation and strong economic demand in the future. The 10-year Treasury yield climbed to 1.5% from 1.48%.

Indeed, the risks have still not disappeared. Supply chain constraints prevent some companies from meeting their sales targets, while the associated higher costs weigh on profit margins. Higher corporate taxes could be on the way. Additionally, bond yields should continue to rise, making future earnings less valuable.

As for the S&P 500, October can be a tough month, especially after a tough September. When the index drops in September, the S&P 500 is only up 54% from October historically, according to Bank of America, with an average decline of 0.4%. The bank said October was also one of the most volatile months.

Meanwhile, the S&P 500 is down just over 4% from its all-time high of September 2. Technically, a correction corresponds to a decrease of 10%. “I don’t think we’ve seen the bottom in equities yet,” wrote Jay Pestrichelli, CEO of ZEGA Financial. “While September’s stock declines were uncomfortable, they were a far cry from a traditional 10% market correction.”

More: Democrats Still Negotiating $ 3.5 Trillion Reconciliation Bill

Overseas, Hong Kong

Hang Seng Index
fell 2.2% as mainland Chinese markets were closed for holidays. The pan-European

Stoxx 600
was up 0.2%.

Hong Kong rocked as shares of heavily indebted real estate developer

China Evergrande

(ticker: 3333.HK) were suspended “pending publication by the Company of an announcement containing inside information on a major transaction”. Reports have circulated in Chinese state media that a rival,

Hopson development
,

would buy a major Evergrande unit. Trading in the Hopson share (0754.HK) has also been halted.

Read also : The stock market has cast aside Evergrande’s concerns in China. Why this is a mistake.

Oil prices were little moved ahead of an OPEC + move, with US crude futures hovering around $ 75.80 per barrel.

Here are nine actions in motion on Monday:

Modern

(MRNA) and

Novavax

(NVAX) saw their shares fall 4.8% and 4.1%, respectively, after the announcement that

Johnson & johnson

(JNJ) is seeking approval from the Food and Drug Administration for its Covid-19 booster injection. Also,

Merck

(MRK) said on Friday that his oral treatment for Covid-19 was effective in reducing the risk of hospitalization. Merck shares rose 3.1%.

Therapeutic sage

(SAGE) and

Biogen

(BIIB) saw its shares rise 0.9% and fall 0.5%, respectively, after the companies announced the effectiveness of a new treatment for depression.

You’re here

(TSLA) rose 3.7% after the electric vehicle group announced a record quarter on Saturday with shipments up 70% from a year ago.

Akamai Technologies

The stock (AKAM) fell 1.9% after being downgraded to the sector weighting from the overweight in KeyBanc Capital Markets.

DuPont de Nemours

(DD) stock gained 3.4% after being overweight Neutral at JPMorgan.

Adidas slipped 1.9% (ADS.Germany), after the sportswear giant’s shares were lowered to Underperform by Bank of America.

Write to Jacob Sonenshine at [email protected]