The Dow Jones Industrial Average edged higher on Monday, outperforming the market, while the Nasdaq Composite fell as traders continued to sell off major technology stocks that fueled the bull market.
The 30-stock Dow rose 358 points, or 0.9%, as investors turned to non-tech stocks such as Caterpillar, JPMorgan and UnitedHealth.
Meanwhile, the tech-rich Nasdaq fell 0.4% and the S&P 500 rose 0.2%. All three benchmarks have fallen over the past two weeks, with tech stocks causing the most damage.
Palantir and Nvidia, two bull market leaders popular with retail investors, lost more than 4% and 2%, respectively, building on their losses from last week. Nvidia fell nearly 6% during that period, while Palantir lost 11%. Other popular tech stocks, including Apple and Micron, also fell.
While tech stocks retreated, the energy sector beat the broader market by adding nearly 2% as oil prices rose higher. Healthcare and materials also rose by around 1.9%.
Rising bond yields were one of the catalysts for the sell-off in growth stocks. 10-year Treasury yield
on Monday it touched its highest level since November 2023. Yields rose on Friday after a stronger-than-expected jobs report cast doubt on further rate cuts by the Federal Reserve.
“With the 10-year yield potentially hitting 5%, I think it’s going to be very difficult for the equity market to make any significant strength here until there’s — at least — interest rate stability,” said Adam Turnquist, chief technical strategist at the firm. LPL Financial.
“We don’t think there is a risk that the market will move into the area of a bear market, but there could certainly be a correction in the short term,” added Turnquist, SEEbiz reports.
Investors are hoping that the start of earnings season in the fourth quarter will stabilize markets. Banks including Citigroup, Goldman Sachs and JPMorgan Chase report on Wednesday, while Morgan Stanley and Bank of America will report results on Thursday.
