Wall Street slips as tax uncertainty and tech losses weigh
- Nasdaq leads early losses as major tech stocks collapse
- Triple Option Expiration May Increase Volatility
- Falling indices: Dow 0.31%, S&P 0.52%, Nasdaq 0.55%
Sept. 17 (Reuters) – U.S. stock indices fell on Friday, with big tech companies weighing the most, as uncertainty over corporate tax hikes and an upcoming Federal Reserve meeting kept traders in the dark. difference.
The Nasdaq (.IXIC) was the worst performing among major U.S. indices at the start of trading, as a batch of good economic readings encouraged investors to look to growth-prone and non-tech sectors this past. week.
“(It was) a volatile week and the value returned to outperformance as bearish buying sentiments set in, but not enough to offset recent market weakness,” said Louise Dudley, Manager global equity portfolio within Federated Hermes’ international operations. .
Fears that a potential corporate tax hike could weigh on profits have also weighed on markets, with Major Democrats seeking to raise the corporate tax rate to 26.5% from the current 21%.
“We anticipate volatility for large caps, as changes in corporate tax rates in the United States will play a role in the future as both sides negotiate, especially for the ‘low tax’ sectors involved such as technology and biotechnology, and companies generating significant international revenues, ”Dudley added.
The focus is also on a Federal Reserve meeting next week, with investors wondering if a batch of strong economic data this week could prompt the bank to shorten its timetable for reducing monetary stimulus.
Thursday’s data showing an unexpected increase in retail sales came on the heels of a stable reading in factory activity and a cooling of inflation, suggesting that the US economic recovery has been resilient despite an increase recent cases of the Delta COVID-19 variant.
Treasury yields also rose on the data, indicating increased optimism about the economy as investors sold safe haven bonds.
At 9:56 a.m. ET, the Dow Jones Industrial Average (.DJI) fell 106.41 points, or 0.31%, to 34,644.91, the S&P 500 (.SPX) was down 23.35 points, or 0, 52%, to 4,450.40 and the Nasdaq Composite (.IXIC) lost 82.92 points, or 0.55%, to 15,099.00.
All three major indexes were heading for small weekly gains, but followed a decline for the month due to weaker seasonal trends in September.
The Nasdaq’a’s monthly losses were the smallest, as investors initially turned to sectors more resilient to economic disruptions from the pandemic. However, this trade could unwind in the coming weeks.
The simultaneous expiration of stock options, stock index futures and index options contracts later in the day, known as triple witching, is also expected to cause volatility throughout the session. of scholarship.
While the phenomenon is not new, the recent growth in options trading volume and increased awareness of this dynamic has resulted in higher volatility during expirations this year.
Among other players, Invesco Ltd (IVZ.N) rose 5% following reports that the investment management firm was in talks to merge with the asset management business of State Street Corp ( STT.N). State Street shares edged down.
Falling issues outnumbered advances by a ratio of 1.5 to 1 on the NYSE and about 1.2 to 1 on the Nasdaq.
The S&P 500 posted 6 new 52 week highs and 2 new lows while the Nasdaq recorded 51 new highs and 36 new lows.
Report by Ambar Warrick in Bangalore; Editing by Arun Koyyur and Saumyadeb Chakrabarty
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