Wall Street signs can be seen near the New York Stock Exchange (NYSE) in New York City, USA
Due to the rise in US Treasury yields, investors dumped large technology stocks and other growth stocks , Wall Street closed sharply lower on Monday, and worries about the default of the US government debt also sparked caution.
Apple, Microsoft , Amazon , and Alphabet , the four most valuable companies in the US stock market, all fell more than 2%.
According to data from the outage tracking website Downdetector.com, Facebook is the fifth most valuable company. After its app and its photo-sharing platform Instagram were paralyzed by thousands of users, the stock price fell nearly 5%.
"For large technology companies, this is a short- to medium-term thing and part of the correction process. Interest rates are clearly too low. This is largely due to central bank policies, and now investors expect these Policies will be retracted and interest rates are closer to their actual value," said Jack Ablin, chief investment officer of Cresset Wealth Advisors in Palm Beach, Florida.
U.S. Treasury yields have risen as investors worry that the U.S. Congress has failed to determine the debt ceiling and look forward to the September employment data released this week, which may pave the way for the Fed to reduce asset purchases.
US President Joe Biden stated that he cannot guarantee that the government will not violate its $28.4 trillion debt ceiling unless the Republicans and Democrats vote to raise the debt ceiling.Because the United States faces the risk of a historic default in just two weeks.
Recent data shows that rising consumer spending, accelerating factory activity, and accelerating inflation growth have intensified bets that the Fed may begin to tighten its loose monetary policy sooner than expected.
The closing prices of the S&P 500 and Nasdaq were the lowest since July.
The S&P 500 Index has now fallen by about 5% from the record high set on September 2.
However, more than half of the S&P 500 stocks have fallen 10% or more from their 52-week highs, and 71 of them have fallen more than 20%.
To make investors more panic, St. Louis Federal Reserve Bank President James Brad warned that inflation may remain high for a period of time.
Certain parts of the market rebounded, with the S&P 500 Energy and Utilities Index both rising.
Merck & Co. shares rose 2.1%. The share price of Merck also rose on Friday because the company is developing the first oral antiviral drug for COVID-19 .
Tesla shares rose 0.8% after the electric car manufacturer announced a record quarterly delivery exceeding expectations.
Dow Jones Industrial Average fell 0.94% to 34,002.92 points,The S&P 500 index fell 1.30% to 4,300.46 points.
The Nasdaq Composite Index fell 2.14% to 14,255.49.
U.S. Trade Representative Catherine Day said on Monday that she intends to have a "frank" dialogue with her Chinese counterparts in the coming days and discuss the progress made in the first phase of the trade agreement.
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