In a surprise move, the three major US stock indexes plummeted overnight on December 28, with the Nasdaq falling below 20,000 points. The Dow, Nasdaq, and S&P 500 indexes closed down 0.77%, 1.49%, and 1.11%, respectively, marking a sharp decline in the US stock market.
Tech Stocks Lead the Decline
The “Seven Big Tech” stocks in the US fell across the board, with Tesla experiencing a significant drop of over 6%. US chip stocks and AI concept stocks also closed down, contributing to the overall decline.
Analysts Point to Treasury Yield as a Key Factor
Wall Street analysts attribute the decline to the rising 10-year US Treasury yield, which reached 4.629% on Friday, near a seven-month high. The higher yield puts pressure on the stock market, making it less attractive to investors.
Outflows and Selling Pressure
The US stock market may also face the risk of significant selling pressure. According to Bank of America data, US stocks have seen outflows of around $35 billion over the past week, the highest weekly outflow since December 2022. Additionally, Goldman Sachs estimates that US pension funds will sell $21 billion in US stocks and buy an equal amount of bonds by the end of December.
Market Volatility Expected to Continue
The sharp decline in the US stock market, driven by the rising Treasury yield and selling pressure, may lead to continued market volatility in the coming days. Investors will be closely watching the market for signs of stability and potential opportunities.
Source: M.theblockbeats.info