Tech shares lead US stocks lower amid inflation worries

NEW YORK – Tech shares were hammered yesterday on Wall Street amid lingering worries over inflation, while shares of industrials and airlines benefited from the latest positive coronavirus vaccine news.

All three major US indices fell, with the Nasdaq slumping 2.7%, as investors monitored rising Treasury yields and digested disappointing economic data.

Earlier, Asian equities won solid gains, while European bourses finished modestly higher.

“After a couple of days of gains, the bullish sentiment in European equities has run out of steam,” said market analyst David Madden at CMC Markets UK, who added that a rise in bond yields put a damper on investor sentiment.

Higher yields “put people a little on edge,” said Briefing.com analyst Patrick O’Hare.

Large tech shares including Apple, Amazon and Google parent Alphabet fell more than 2%. 

But it was a different story for industrial companies such as Boeing, airlines and petroleum producers, which are seen as poised to benefit from an economic recovery once Covid-19 vaccines become widespread.

The US vaccine outlook improved further on Tuesday when President Joe Biden said there would be sufficient supply for all American adults by the end of May following a partnership between Johnson & Johnson and Merck.

In London, British Chancellor of the Exchequer Rishi Sunak presented the government’s budget, which includes plans to ramp tax on company profits up to 25% from 2023 as the country faces surging debt taken on to prop up the economy during Covid-19 lockdowns.

But a special tax break on business investments helped sweeten the fiscal medicine, and could encourage firms to ramp up spending.

Sunak had said on Tuesday that he will extend his multi-billion-pound furlough scheme paying the bulk of wages for millions of private-sector workers.

Hospitality, travel and real estate firms rallied as Britain looks to reopen its shattered economy, which tanked almost 10% last year. 

In other markets, oil prices advanced strongly on the eve of a key OPEC+ producers’ meeting. – AFP, March 4, 2021