Stocks moved mostly lower during trading on Tuesday, extending the pullback seen over the course of the previous session. The Nasdaq hit its worst intraday level in well over a month in early trading but rebounded to end the day only modestly lower.
After plunging as much as 2.2 percent, the tech-heavy Nasdaq closed down just 12.43 points or 0.1 percent at 13,389.43. Meanwhile, the Dow tumbled 473.66 points or 1.4 percent to 34,269.16 and the S&P 500 slid 36.33 points or 0.9 percent to 4,152.10.
The weakness on Wall Street partly reflected concerns about an acceleration in the rate of inflation and potential monetary policy tightening by the Federal Reserve.
The Fed has attributed the increase in inflation to “transitory factors,” although analysts have suggested the central bank will still begin considering tapering its asset purchases in the coming months.
Adding to the inflation concerns, the Labor Department released a report showing the number of job openings reached a series high of 8.1 million on the last business day of March.
The data led to worries that employers will have to raise wages to entice workers, which could carry over into higher inflation.
The inflation concerns contributed to an early sell-off by tech stocks, although selling pressure waned over the course of the session.
Tech giant Apple (AAPL) tumbled as much as 3.2 percent in early trading to hit its lowest intraday level in over a month before regaining ground and ending the day down by 0.7 percent.
Shares of Tesla (TSLA) slumped by 1.9 percent after a report from Reuters said the electric car maker has halted plans to buy land to expand its Shanghai plant and make it a global export hub.
Housing stocks turned in some of the worst performances on the day, with the Philadelphia Housing Sector Index plunging by 3.2 percent after ending the previous session at its best closing level since a two-for-one split in early 2006.
Substantial weakness was also visible among oil stocks, as reflected by the 2.4 percent slump by the NYSE Arca Oil Index. The index extended the pullback seen after it reached a one-year intraday high in early trading on Monday.
The weakness among oil stocks came even though the price of crude oil turned higher over the course of the session after an early drop.
Computer hardware stocks also showed a significant move to the downside, dragging the NYSE Arca Computer Hardware Index down by 2.4 percent to its lowest closing level in over a month.
Transportation, banking and commercial real estate stocks also saw notable weakness, while steel and gold stocks bucked the downtrend.
In overseas trading, most stock markets across the Asia-Pacific region moved sharply lower during trading on Tuesday. Japan’s Nikkei 225 Index plummeted by 3.1 percent, while Hong Kong Hang Seng Index tumbled by 2 percent.
The major European markets also showed significant moves to the downside on the day. While the U.K.’s FTSE 100 Index plunged by 2.5 percent, the French CAC 40 Index and the German DAX Index slumped by 1.9 percent and 1.8 percent, respectively.
In the bond market, treasuries extended the downward move seen over the course of the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.2 basis points to 1.624 percent.
In light of the concerns about inflation, trading on Wednesday may be impacted by reaction to a report on consumer prices in the month of April.
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