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A late rally in big technology stocks erased an afternoon slump on Wall Street and left major indexes moderately higher. The uneven start to May followed a brutal April in which widespread technology sell-offs dragged down major benchmarks.
The S&P 500 ended up 0.6 per cent higher. It was down as much as 1.7 per cent earlier. The Dow Jones Industrial Average rose 0.3 per cent and the Nasdaq added 1.6 per cent.
The Australian sharemarket is set for more losses, with futures at 6.00am AEST pointing to a fall of 21 points, or 0.3 per cent, at the open. The ASX dropped by 1.2 per cent on Monday. The Reserve Bank of Australia meets today, and is widely expected to raise interest rates for the first time since 2010.
Wall Street continues to head south.Credit:NYSE
Facebook’s parent company and chipmaker Nvidia each rose more than 5 per cent.
The uneven start to May follows a dismal April, where Big Tech companies dragged the broader market lower as they started to look overpriced, particularly with interest rates set to rise sharply.
US crude oil prices were relatively unchanged after slipping earlier in the day. European energy ministers are meeting in Brussels to discuss Russian supply issues and sanctions. Russia’s invasion of Ukraine prompted a jump in already high oil and natural gas prices.
Bond yields rose significantly. The yield on the 10-year Treasury was at 2.98 per cent after briefly rising to 3.00 per cent from 2.89 per cent late Friday. It hadn’t been above 3 per cent since Dec. 3, 2018, according to Tradeweb.
Treasury yields have been rising all year as investors prepare for higher interest rates. Markets are expecting an extra-large interest rate increase this week from the Federal Reserve as it tries to tame inflation, which is at its highest level in four decades.
The central bank is expected to raise short-term interest rates by double the usual amount when it releases its latest statement on Wednesday. It has already raised its key overnight rate once, the first such increase since 2018, and Wall Street is expecting several big increases over the coming months.