After Their Best Performance Since June, Stock ETFs Slip on Tuesday etftrends.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from etftrends.com Daily Mail and Mail on Sunday newspapers.
Technology stocks, which tend to be more affected by interest rates, sold off earlier as the 10-year Treasury yield crested 1.4% to notch its highest level since February 2020. But some tech ETFs like the
“Volatility along the way is to be expected, and higher rates will continue to drive more risk down into sectors and factors, but … dips in the equity market are meant to be bought in this environment,” Christopher Metli, a quantitative and derivative strategist at Morgan Stanley, said in a note.
Powell Comments Reverberating throughout Market
Despite comments from Federal Reserve Chair Jerome Powell in a congressional hearing Tuesday that inflation was ‘soft’ and that the U.S. economy was “a long way from our employment and inflation goals,” Treasury yields continue to surge.
Spiking Treasury yields are irking investors as they fear the rise could affect high-growth companies that count on the bonds for easy borrowing. These yields also limit the desire for risk appetite and stocks.
Key stocks and ETFs like the
Vanguard Information Technology ETF (VGT) are falling, as Apple, Amazon, Microsoft, Netflix, and Alphabet all traded at least 1% lower. Meanwhile, energy ETFs like the
Treasury Yields Moving Upwards
The 10-year Treasury yield surged 14 basis points last week to 1.34%, near its highest level since February 2020. The benchmark yield reached a high of 1.37% before flattening out, making for a collective pop of 25 basis points in February.
WKBT
February 21, 2021 7:17 AM newsfeedback@fool.com (Catherine Brock)
Posted:
Updated:
February 24, 2021 5:12 AM
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