Wednesday, 24 February 2021
The Nasdaq index fell in volatile trading on Tuesday as investors sold off mega-cap growth stocks on valuation concerns, although Federal Reserve Chairman Jerome Powell's comments on the economy helped ease some selling pressure.
In his testimony to the Senate Banking Committee, Powell pushed back on suggestions that the U.S. central bank's support for the economy risked inflating a dangerous asset bubble.
Fears of a potential spike in inflation from a raft of stimulus measures and a rise in bond yields have triggered a selloff in the technology-related stocks, which were at the heart of a stunning rally that drove major indexes to record levels this year.
"What the market has been digesting for the last week or so is what it means when the yield on the U.S. 10-year rises? That clearly suggests that either we are going to get some stronger economic activity or inflation is on the rise," said Art Hogan, chief market strategist at National Securities in New York.