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Stocks opened lower and began to fall seriously by mid-morning, holding onto losses for the remainder of the trading session. The Dow (UNDUE) closed some 320 points, or 0.9%, down. At the low of the day, the index had lost more than 500 points.
The S&P 500 (SPX), a larger indicator of the US stock market, ended down 1.3%, while the Nasdaq Composite (COMP) fell the most with a decline of 2.1%.
Tech stocks led the losses, with Twitter (TWTR) and Facebook (FB) among the poorest performers in the S&P. Facebook – which has shut down nearly 5% – faces an outage on its platforms, as well as new allegations from whistleblower Frances Haugen that the company prioritizes profit over how its platform is used to spread hatred, violence and disinformation. Facebook rejected these claims.
There are a lot of broader headwinds for investors in US equities. The main concern is the fight against the debt ceiling in Washington, as President Joe Biden spoke this morning on the local debt crisis. He continues to push Congress to raise the debt ceiling; Congress has until Oct. 18 to increase the country’s borrowing limit.
“The United States pays its bills and it always has,” Biden said. Raising the debt limit is usually a two-party business, and it should be. But this is not the case today, “he added.
“Republicans in Congress – what they’re doing today is so reckless and dangerous in my opinion. Raising the debt is paying what we already owe, what has already been earned, nothing new,” Biden said. during his speech. .
Meanwhile, concerns about prolonged high inflation are leading investors to pull out of tech stocks, which had performed strongly during the worst of the pandemic. A key measure of inflation hit a new 30-year high on Friday.
As stocks fell, US Treasury yields – which track inflation and interest rate expectations – rose to 1.48% as the stock market closed. Bond yields and prices move in the opposite direction of each other.
Energy in focus
Energy stocks were the only bright spot in the market on Monday. Oil prices hit their highest level since 2014 and pushed the sector up.
U.S. oil prices rose more than 2% to $ 77.62 a barrel after the Organization of the Petroleum Exporting Countries and its allies reaffirmed their existing production plan to increase monthly output by 0.4 million barrels per day in November.
“In the longer term, rising crude oil prices will only exacerbate inflationary pressures, especially for some emerging market economies like India,” ThinkMarkets analyst Fawad Razaqzada said in a note to clients .
“The pressure on OPEC + to restore supply to the market more quickly had increased before today’s meeting,” said Capital Economics commodity economist Kieran Clancy. “We believe that their refusal means that the market will remain in deficit in [the fourth quarter], which suggests that oil prices will remain high for at least the rest of the year, ”he added.
– CNN’s Betsy Klein and CNN Business’s Clare Duffy contributed to this report.
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