Technology companies led stock losses in another leg down for pricey growth shares under threat from rising rates and inflation. Some corporate warnings about the negative impacts of the omicron coronavirus variant also soured sentiment.
The Nasdaq 100 dropped about 2%, while Treasury 10-year yields climbed to 1.8%. Lululemon Athletica Inc. tumbled as the maker of yoga pants said omicron was constraining its operations, while Torrid Holdings Inc. plunged after the plus-size women’s clothing retailer cut its sales forecast as the variant caused disruptions to its workforce.
Bitcoin fell for the fifth time in six sessions, putting it on pace for the worst start to a year since the earliest days of the digital alternative to money.
Markets are facing higher volatility as the pandemic liquidity that helped drive equities to record highs is withdrawn. The Federal Reserve will likely raise interest rates four times this year and will start its balance-sheet runoff process in July, if not earlier, according to Goldman Sachs Group Inc. [see earlier post].
A key measure of U.S. inflation — set to be released Wednesday — is anticipated to have increased further in December.
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