In the early morning of the 29th Beijing time, US stocks closed lower on Tuesday. Rising U. S. bond yields put pressure on stock indexes. Investors continue to pay attention to the budget stalemate in the U.S. Congress. Powell said the Fed almost met the conditions for scaling back its bond purchases. U.S. Treasury Secretary Yellen stressed that if Congress does not raise the debt ceiling, there will be a financial crisis and disaster.
The Dow fell 569.38 points, or 1.63%, to 34299.99; the Nasdaq fell 423.29 points, or 2.83%, to 14546.68; and the S & P 500 fell 90.48 points, or 2.04%, to 4352.63.
Treasury yields continued to climb rapidly on Tuesday, with 10-year yields above 1.55%, rising as high as 1.558%, the highest since June. As inflation soars, investors are betting that the Fed will deliver on its promise to scale back its emergency bond-buying stimulus.
Since the Fed signalled last week that it would scale back its bond purchases by $120 billion a month "soon", yields on 10-year Treasuries have risen sharply to their highest level since June.
The yield on 10-year treasury bonds fell as low as 1.29 per cent last week and as low as 1.13 per cent in august. The yield on the 30-year Treasury note exceeded 2%.
As Treasury yields rise, such as Facebook Inc、 Amazon.Com Inc、 Apple Inc、 Netflix、 Alphabet Inc-CL CParent companies Alphabet, NVIDIA Corp, AMDAnd Tesla, Inc.Large technology stocks, such as those sensitive to inflation and Treasury yields, generally fell.
The decline in technology stocks is a drag on market sentiment. It is widely believed that the rapid rise in Treasury yields reduces the value of future cash flow of technology companies, which in turn makes hot technology stocks look overvalued. In addition, the rise in Treasury yields has hampered the ability of technology companies to finance their growth and buy back shares.
Analysts say that when stock index futures fall so sharply, it is usually because multibillion-dollar funds predict that the technology industry will fall by 3% to 4%, so they exit early.
On Tuesday, Federal Reserve Chairman Colin Powell and U.S. Treasury Secretary Yellen attended a hearing of the U.S. Senate Committee on Banking, Housing and Urban Affairs to explain how their agencies responded to the impact of the epidemic on the economy. Before the hearing, US stocks plummeted and the yield on the 30-year Treasury note climbed more than 10 basis points on the day.
Powell said at the meeting that the United States still has a long way to go to achieve maximum employment. The Fed has almost met the conditions for downsized bond purchases, and even if it reduces its bond purchases, it will increase easing by the middle of next year, increasing liquidity as long as the Fed is still buying bonds. Powell pointed out that the Fed has only passed the pre-retrenchment test, and the threshold for raising interest rates is much higher.
U.S. Treasury Secretary Yellen said at the hearing that failure to raise the federal debt ceiling would be catastrophic. Failure to raise the debt ceiling could damage credibility, undermine confidence in the dollar, raise unemployment and cause market problems. The debt limit has nothing to do with future plans and is all about paying bills that have already been generated.
Yellen stressed that if Congress does not raise the debt ceiling, there will be a financial crisis and disaster. Failure to raise the debt ceiling will cause yields to soar, interest paid by Americans will rise as the cost of borrowing government bonds rises, and default will be a man-made crisis and self-inflicted damage. Nothing is more harmful to the dollar than failing to raise the debt ceiling.
Analysts say the hawkish shift in the Fed has pushed up Treasury yields, and the Fed announced last week that it could begin to scale back its stimulus measures as soon as November, hinting that interest rates could rise sooner than expected.
At one point on Tuesday morning, the Nasdaq fell more than 400 points, continuing its decline since September. Us stocks have been weak since September, with the Dow down 1.4% since the start of the month, the s & p 500 down 1.8% and the Nasdaq down 1.9%. Investors are worried about the rapid spread of the new Guandalta variant, the Fed's tapering plan and inflation.
UBSMark Haefele, chief investment officer of global wealth management, said: "We do not expect the rise in US Treasury yields to end the stock market rally. It is good for cyclical sectors such as finance and energy, but not for high-growth sectors such as technology stocks, as higher Treasury yields reduce the value of future cash flow."
The final battle of the US congressional budget also dampened market sentiment. Senate Republicans on Monday vetoed a bill passed by the House of Representatives to provide financing to keep the government running until December and push back the debt ceiling to December 2022.
Congress must approve the government financing package by Friday to avoid a government shutdown and raise the debt ceiling as soon as possible to avoid an unprecedented default by the US government.
House Speaker Nancy Pelosi said Tuesday that the House of Representatives may vote on the debt ceiling today. But U.S. Senate Minority Leader Mitch McConnell insists he will not help on the debt ceiling.
In economic data on Tuesday, the U. S. consumer confidence index unexpectedly fell to a seven-month low in September.
Consumer confidence in the United States fell for the third month in a row in September, indicating that concerns about the Delta strain and rising prices continue to dampen market sentiment.
The index of consumer confidence fell to 109.3 in September from a revised 115.2 in August, according to a report by the Economic Advisory Bureau on Tuesday. Economists had expected 115.0.
These data suggest that the spread of the Delta strain continues to undermine consumer expectations for the economy and affects spending on services. Although new cases have fallen from their recent peak, they are still on the rise in some states. At the same time, Americans are paying higher prices for household goods, further dampening consumer sentiment.
Focus stocks
Ford MotorIt said it would work with South Korean battery maker SK Innovation to invest $11.4 billion to build two "giant plants" in Tennessee and Kentucky to produce electric trucks and batteries. Ford's share of the investment, at $7 billion, is the largest manufacturing investment in the company's 118-year history, with SK taking the rest.
Pfizer IncAnd BioNTech submit vaccination data for people between the ages of 5 and 12 to the U.S. Food and Drug Administration (FDA). Pfizer Inc and BioNTech also said in a joint statement that they would formally submit an emergency use authorization (EUA) application in the next few weeks.
French pharmaceutical giant SanofiIt was announced that the phase III trial of the mRNA COVID-19 vaccine would be stopped. This shows that the company has stopped the research and development of the COVID-19 vaccine. It is reported that Sanofi stopped the research and development of mRNA COVID-19 vaccine because the vaccine has missed the best time to launch. Sanofi said the company will continue to promote the research and development of the recombinant protein COVID-19 vaccine. The vaccine research and development program has now entered the third phase of large-scale clinical trials, and phase III trial data are expected to be obtained by the end of this year.
Brazilian regulators will once again fine Apple Inc because the new iPhone 13 does not come with a charger, which means a disguised price increase for consumers, local time reported on Monday.
According to the Forbes real-time rich list, Tesla, Inc. CEO Musk is now at the top of the Forbes real-time rich list, with a fortune of more than $200 billion, reaching $203.4 billion. Musk has become the third billionaire after Bezos and Arnault to reach $200 billion.
Musk also announced that Tesla, Inc. plans to add about 1000 new fully autopilot testers a day according to their "safety score" from next week.
A preliminary independent investigation report obtained by regulators in the Australian state of Victoria on Tuesday showed that the fire in Tesla, Inc. 's Megapack in July was caused by "no coolant leakage found when starting the test". Cooperate with Tesla, Inc. to develop the French Electric Power of the project.Manufacturer Neoen said the facility would resume testing operations on Wednesday. Neoen is actively working with Tesla, Inc. to ensure that the 450MW-hour energy storage project is ready for Australia's summer, which begins in December.
Toyota will split its shares into five shares at the end of September. This is Toyota's first split in 30 years since 1991. With an investment unit of 100 shares, the minimum amount required for investment will be reduced from more than 1 million yen to more than 200000 yen. Toyota ranks first among domestic companies in terms of market capitalization, but only 15th in terms of shareholders at the end of the last fiscal year. The move appears to be aimed at increasing the number of individual shareholders who hold shares for a long time to support the share price.
IdealIn September, 16 new directly operated delivery centers were added, including 7 formal delivery centers and 9 cooperative delivery centers. As of September 28th, Li Auto Inc. has 55 directly operated delivery centers, covering 53 cities across the country.
In other markets, gold futures for December delivery on the New York Mercantile Exchange fell $14.50, or 0.8%, to close at $1737.50 an ounce. Tuesday's gold futures closed at their lowest close since Aug. 10, based on the most active contract prices.
Treasury yields rose in tandem with the dollar, putting pressure on gold prices. The yield on the benchmark US 10-year Treasury note rose above 1.5 per cent on Tuesday, while the dollar index (DXY) rose 0.4 per cent.
The rise in Treasury yields reduces the attractiveness of gold, which does not offer interest rates. The rise in the dollar makes gold more expensive for those who use other currencies, and it also puts pressure on gold prices.
Gold market investors also weighed the remarks made by Federal Reserve Chairman Colin Powell before the Senate Banking Committee. Powell said on Tuesday that some of the supply-side bottlenecks behind the surge in inflation had "got worse".
Meanwhile, silver futures for December delivery fell 23 cents, or 1%, to $22.467 an ounce.
December copper futures fell 1 per cent, benefiting nearly $4.247 a pound.
The January platinum contract fell 1.6 per cent to $961.90 an ounce. The palladium contract fell 4.8 per cent to $1854.20 an ounce in December.
West Texas Intermediate (WTI) for November delivery fell 16 cents, or 0.2%, to $75.29 a barrel on the New York Mercantile Exchange. On Monday, the futures closed at $75.45, the highest close since October 2018.