Wall Street closed in the red today following a sell-off of tech stocks as US Treasury yields hit a 15-month high.
The S&P 500 and Dow Jones both dropped 0.3 per cent, while the Nasdaq slipped 0.1 per cent.
It came after the FTSE 100 pushed higher following a volatile start to the week as investors dealt with the impact of the collapse of a US hedge fund.
London’s blue chip index closed 0.5 per cent higher at 6,772 points.
Tech pushes Wall Street lower
Tech stocks were the main drag on US markets today as US Treasury yields rose to fresh highs.
Shares in Apple, Amazon and Microsoft all closed lower.
The Nasdaq is on track for its first monthly loss since November following the recent rise in Treasury yields. Tech stocks, which have a low-rate environment heavily baked in to their high valuations, have been among the hardest hit by the rise in yields.
It came after a choppy day of trading as news emerged a US hedge fund, widely reported as Archegos Capital, defaulted on margin calls, sparking potentially billions of dollars in losses for Credit Suisse and Nomura.
Last week a handful of Chinese tech stocks, including Alibaba and Tencent, and ViacomCBS faced a heavy selloff. It was initially thought the stocks came under pressure because of delisting fears but it was since emerged that it was mainly because Archegos Capital Management was forced to liquidate its position.
Alongside Japanese investment bank Nomura, Credit Suisse warned of “significant losses” stemming from the fund.
FTSE 100 ticks up
The FTSE 100 performed better today, shrugging off concerns about the Archegos saga to make modest gains.
HSBC, L&G and Barclays led the index, posting strong gains despite a volatile day of trading for banking stocks on Monday amid the hedge fund fallout.
“Two recent worries for the market seemed to have eased on Tuesday with the Suez Canal finally unblocked and concern over the Archegos family office saga beginning to die down,” says AJ Bell investment director Russ Mould.
“This is allowing markets to focus on President Biden’s latest plan to revive the US economy – a massive wad of infrastructure spending.
“The FTSE 100 was certainly putting on its happy face, driven by resources and financial stocks.”
Astrazeneca and Imperial Brands bucked the trend shedding 1.4 per cent and 0.9 per cent respectively.
The tobacco giant said it expected group net revenue growth of at least one per cent in the first half.
“Overall tobacco volumes are in line with expectations although Covid-19 continues to affect consumer buying patterns across different channels and markets,” the company said in a statement this morning.