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Market Snapshot: Dow drops 600 points as tech-led selloff broadens

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U.S. stocks slumped sharply Tuesday, as a selloff for megacap, tech-related stocks blamed in part on inflation fears broadened out to drag down other sectors.

What are major benchmarks doing?
  • The Dow Jones Industrial Average
    DJIA,
    -1.43%

    fell 602.34 points, or 1.7%, to 34,140.48.
  • The S&P 500
    SPX,
    -1.11%

    gave up 66.33 points, or 1.6%, to trade at 4,122.10.
  • The Nasdaq Composite
    COMP,
    -0.56%

    was down 180.92 points, or 1.4%, at 13,220.94.

On Monday, a tech-led selloff sent the Nasdaq down 2.6% to its lowest close since March 31, while the S&P 500 slumped 1%. The Dow gave up a gain of more than 300 points that had taken it to an all-time high above 35,000 to end the day down 34.94 points, or 0.1%.

What’s driving the market?

Big tech shares continued to feel the pain Tuesday, with shares of Facebook Inc
FB,
-0.60%
,
Microsoft Corp. MSFT and Google parent Alphabet Inc.
GOOG,
-1.41%

GOOGL,
-1.14%

down more than 1%, while Apple Inc.
AAPL,
-1.52%

slid more than 2%.

But tech shares came off early session lows, while other sectors, including cyclical areas expected to benefit most from the economic reopening, stumbled. The S&P 500 energy sector fell 2.7%, while industrials were off 2.1%.

Analysts expect a jump in consumer prices and supply shortages in goods like computer chips and some commodities as economies reopen and pent-up demand is unleashed by households, businesses and entire industries.

“We’re at a point of major readjustment following an unprecedented economic shock and this is fueling concerns that rising inflation will trigger central banks to tighten monetary policy which will hit asset prices,” said Nigel Green, chief executive of de Vere Group, in emailed comments.

“It is this scenario that is rattling markets and triggering a global selloff.”

Investors are also concerned about the U.S. labor market after a much smaller-than-expected rise in nonfarm payrolls in March was reported on Friday, while companies continue to report difficulties filling open positions.

The National Federation of Independent Business said Tuesday its monthly survey found a record 44% of small businesses said job openings went unfilled in April.

Separately, the Labor Department on Tuesday said job openings in the U.S. topped 8 million in March for the first time ever. There were 7.5 million open jobs in February.

Investors will also hear from several Federal Reserve officials on Tuesday, including New York Fed President John Williams, Fed Gov. Lael Brainard, San Francisco President Mary Daly, Atlanta Fed Raphael Bostic, Philadelphia Fed President Patrick Harker, and Minneapolis Fed President Neel Kashkari.

Which companies are in focus?
What are other markets doing?
  • The yield on the 10-year U.S. Treasury note
    TMUBMUSD10Y,
    1.621%

    rose 2.5 basis points to 1.623%. Yields and bond prices move in opposite directions.
  • The ICE U.S. Dollar Index
    DXY,
    -0.10%
    ,
    a measure of the currency against a basket of six major rivals, was down 0.1% after trading at its lowest since late February.
  • Oil futures were under pressure, with the U.S. benchmark
    CL00,
    +0.03%

    down 0.4% at $64.64 a barrel on the New York Mercantile Exchange Gold futures
    GC00,
    -0.47%

    were lower, down 0.4% at $1,830 an ounce.
  • European equities fell sharply, with the Stoxx Europe 600
    SXXP,
    -2.31%

    down 2.3% and London’s FTSE 100
    UKX,
    -2.75%

    falling 2.8%.
  • Hong Kong’s Hang Seng Index
    HSI,
    -2.03%

    dropped 2%, while the Shanghai Composite
    SHCOMP,
    +0.40%

    rose 0.4% and Japan’s Nikkei 225
    NIK,
    -3.08%

    sank 3.1%.

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