NEW YORK (AP) – Bank and technology stocks led another slide on Wall Street on Friday and all major indices are on track for a weekly loss.
After taking the S&P 500 to an all-time high last week, investors have been taking money off the table as the Federal Reserve moves to reduce its economic stimulus and fight inflation.
Both the S&P 500 and the Nasdaq, led by technology stocks, are heading for their third weekly decline in the last four. Tech stocks have led losses as Wall Street prepares for the announced interest rate hike. Microsoft fell 1.2% and Adobe lost 3%.
Large technology companies often have high valuations based on assumptions about their future profitability. Investors tend to accept higher valuations more easily when interest rates are extremely low, giving them fewer profitable alternatives. With interest rates on the verge of soaring, investors are reconsidering the high valuations that accompany the tech giants.
Being 12:38 in the afternoon, the technology index fell 0.03%. About 70% of the stocks within the benchmark were losing ground.
The benchmark S&P 500 index was down 0.65% and the Dow Jones industrial average, which tracks 30 of the biggest stocks, was down 1.17%.