Nasdaq futures dropped more than 1% on Tuesday, potentially presaging another day of losses for technology-related stocks with perceived high valuations on worries over inflation.
Shares of Apple, Facebook Inc, Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc dropped between 1% and 2% in premarket trading, while Tesla Inc fell nearly 4%.
The yield on benchmark U.S. 10-year Treasury note ticked up to 1.604% ahead of consumer price index report on Wednesday, with investors fearing that a strong reading could prompt the Federal Reserve to alter its ultra loose monetary policy.
“It seems to be a combination of inflation fears making a comeback and some market participants moving higher along the value spectrum, cutting their exposure to anything with a stretched valuation,” said Marios Hadjikyriacos, investment analyst at online broker XM in Cyprus.
MacDailyNews Take: ‘Tis best to get a handle on inflation, if you know how, while you still can.
Inflation is repudiation. — Calvin Coolidge
When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]