By Yasin Ebrahim
Investing.com -- The Dow slipped Thursday, pressured by a stumble in big tech amid rising Treasury yields as investors bet on a more hawkish path for rate hikes.
The Dow Jones Industrial Average fell 0.46% or 146 points, the S&P 500 fell 1%, and the Nasdaq was down 1.73%
Tech added to losses from a day earlier as the 10-year Treasury yield traded close to highs for the year after Federal Reserve chairman Jerome Powell indicated Wednesday that rates will have to be raised to a higher level than previously expected.
“The FOMC hiked rates by 75bp at its November meeting and underscored that ongoing increases will be necessary,” Morgan Stanley said in a note.
Apple (NASDAQ:AAPL) led the move to the downside for big tech falling more than 4%, followed by Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN).
“If Apple, Amazon and Microsoft keep going lower, then it’ll be awful hard for the S&P 500 to rise as these companies make up such a large share of the market,” John Luke Tyner, portfolio manager at Aptus Capital Advisors, said in an interview with Investing.com on Wednesday.
This move lower could push the S&P 500 to about 3,200, well below current levels of about 3,729, John said, leading to a “more reasonable valuation multiple on the S&P 500 to about a 14-or-15 times [price over earnings multiple].”
The earnings front, meanwhile, delivered mixed quarterly results.
Under Armour Inc (NYSE:UAA) climbed more than 11% after reporting quarterly earnings that topped Wall Street estimates, though the athletic apparel maker did narrow guidance amid a “challenging retail environment.”
Peloton Interactive (NASDAQ:PTON) cut gains to close more than 8% higher after management said the connected fitness equipment remained on track to achieve break-even cash flow by the second half of next year. The comments in the earnings call offset quarterly results that showed a wider than expected loss in Q3.
Zillow (NASDAQ:ZG) reported a beat on both the top and bottom lines in Q3, though warned of lower revenue in the final quarter of the year as rising mortgage rates weighs on demand.
In other news, Boeing (NYSE:BA), a major Dow component, jumped after the aircraft maker detailed plans to increase production and deliveries of new aircraft.
On the economic front, weekly jobless claims unexpectedly declined pointing to a robust labor market and stoked expectations for an upside surprise in Friday's monthly jobs report, which will likely fuel further bets on a hawkish Fed.
Economists expect that 200,000 new jobs were created last month, which would still be a "historically strong number, this late in the in the cycle," Eric Diton, president and managing director at The Wealth Alliance, said in an interview on Thursday with Yasin Ebrahim's Investing.com.
"Job openings increased last month, there's more companies looking for workers, so I don't see how that's going to be followed by a weak October jobs report as that would be inconsistent," Diton added. "If there's a surprise, it's not going to be on the downside but on the upside."