By Yasin Ebrahim
Investing.com -- The S&P 500 pared some gains Monday as tech eased from session highs amid concerns about an increasingly hawkish Federal Reserve at a time when the slowdown in the economy is expected to pick up pace.
The S&P 500 fell 1%, the Dow Jones Industrial Average 1.2%, or 365 points, and the Nasdaq was down 0.42%.
Tech gave up its intraday gains, pressured by an ongoing climb in Treasury yields as Fed members suggest measures to slow growth including rate hikes increase the chance of the economy falling into recession.
Atlanta Federal Reserve president Raphael Bostic said the Fed “still has a ways to go” to bring down inflation. Bostic’s remarks come hours after Boston Fed President Susan Collins said higher unemployment would be needed to help curb inflation.
The U.S. 10-Year Treasury yield climbed to nearly 4%, while the U.S. 2-Year Treasury climbed to about 4.3% to a 15-year high.
Apple (NASDAQ:AAPL), however, weathered the storm following positive commentary on iPhone demand from JPMorgan.
JPMorgan cited the Wave7 August survey showing Apple’s new product line is expected to fare better than the iPhone 13.
Chip stocks also added pressure on the tech sector, driven by NVIDIA Corporation (NASDAQ:NVDA), Advanced Micro Devices Inc (NASDAQ:AMD), and Micron Technology Inc (NASDAQ:MU) down more than 1%.
Utilities, a bond-proxy that is less attractive in a rising rate environment, also played a role in the market selloff.
Energy fell more than 2% as oil prices continued to tumble on worries that worsening global growth will further dent energy demand.
“At current levels, it appears the market is now pricing-in the typical impact of a deep recession,” ANZ Research said in a recent note, though added that the selloff in oil “could see OPEC intervene again.”
Halliburton Company (NYSE:HAL), ONEOK Inc (NYSE:OKE), and Baker Hughes Co (NASDAQ:BKR) fell sharply with the latter down about 5%.
Consumer stocks, however, were the relatively outperforming sector on the day, lifted by a surge in casino stocks after Macau said it would resume visitation access from Mainland China through tours and e-visas.
Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), and Melco Resorts & Entertainment Ltd (NASDAQ:MLCO) were up double-digits.
In other news, PG&E (NYSE:PCG) was up more than 1% as the company is set to replace Citrix Systems (NASDAQ:CTXS) in the S&P 500.