TECH shares continued to drop for a second straight day the morning of February 23, as investors await Federal Reserve Chairman Jerome Powell’s testimony in Congress on the health of the economy.
The Dow Jones shed 70 points, while the S&P 500 slipped by 0.5 percent and Nasdaq declined 1.3 percent.
What happened to the stock market today?
Powell began the first of two speeches before Congress this week the morning of February 23.
Topics include monetary policy and the state of the economy, with investors closely listening for comments related to inflation or the recent rise in treasury yields.
The yield on the 10-year US Treasury note ticked higher on February 23, to around 1.39 percent – up from 1.1 percent less than two weeks ago.
However, higher rates disrupt the present value of future cash flows – especially for growth companies like technology firms.
Tech stocks have been sliding in the past few days because of higher rates, which continued on February 23.
The S&P 500 ticked down for a sixth consecutive day on February 23, it’s longest losing streak since last February.
What did Federal Reserve Chairman Jerome Powell say during his Congress testimony?
On February 23, Federal Reserve Chairman Powell told lawmakers that the economic rebound from the Covid pandemic had further to go.
The Fed chairman reiterated that the central bank planned to keep up its growth-stoking policies, which include rock-bottom interest rates and large-scale bond buying.
Stocks traded off their session lows after Powell’s prepared testimony to Congress said that inflation was “soft,” easing fears of a policy change by the central bank.
“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” Powell said to the Senate Banking Committee.
“Although there has been much progress in the labor market since the spring, millions of Americans remain out of work.
“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.”
Did Bitcoin and other cryptocurrencies also tumble?
Cryptocurrencies Bitcoin, Ether and Dogecoin tumbled the morning of February 23, by more than 10 percent.
Bitcoin fell below the $50,000 mark, while Dogecoin and Ether plummeted by more than 10 percent.
In less than 24 hours, the price of Bitcoin declined from $46,605 to $44,964.
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Dogecoin – the meme-inspired cryptocurrency that’s become an online cult favorite – plummeted by more than 20 percent to roughly 4.4 cents.
Ether, the second most expensive crypto next to Bitcoin, sank nearly 10 percent to $1,455.
The steep decline sent the cryptocurrency market’s total value down about 16 percent to nearly $1.4trillion just days after it soared to all-time records, according to Coinmarketcap.