US Equities Retreat, Growth Stocks Struggle Amid Rising T-Yields

Wall Street’s main indexes retreated in mixed trading Thursday. Technology and growth equities are struggling to find direction amid rising treasury yields and weaker risk appetite on the back of accelerating concerns around soaring inflation and aggressive interest rate hikes.

The Dow Jones Industrial Average was down 60.73 points, or 0.18%, at 32,850.17, the S&P 500 was down 9.04 points, or 0.22%, at 4,106.73, and the Nasdaq Composite was down 30.00 points, or 0.25%, at 12,056.27.

Tesla Inc rose 3.9% as the electric automaker sold 32,165 China-made vehicles last month, up sharply from 1,152 in April. Brokerage UBS upgraded the stock to “buy” and raised its profit estimates for the next three years. Alibaba Group slipped 1.6% after its affiliate Ant Group said it has no plan to initiate an initial public offering.

Nine of the 11 major S&P sectors have declined in morning trade, with energy and materials among the biggest losers. Defensive consumer staples sector was the top gainer, up 0.5%. Apple and Amazon.com slid 1%, dragging the S&P 500 and the Nasdaq indexes lower. Bank of America (BAC.N) slipped 1.7%, while the broader banks index shed 1.2%.

Rate-sensitive growth stocks are under pressure from the benchmark US 10-year Treasury yield, which climbed as much as 3.07% to its highest level since May 11. Inflation worries came to fore ahead of US consumer price index report on Friday as Brent crude prices rose above $123 a barrel. Investors fear a hot reading on inflation could keep the US Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor market.

The market has been in a tight trading range. The volume in either scenario, buying or selling, has been weak and that is indicative of a market without commitment. The US central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July.


China’s central leadership has given a tentative green light to Jack Ma’s Ant Group to revive its initial public offering in Shanghai and Hong Kong. The CBOE volatility index also known as Wall Street’s fear gauge, rose after two straight days of fall and was last trading at 24.63 points.

The S&P index recorded three new 52-week highs and 30 new lows, while the Nasdaq recorded 11 new highs and 56 new lows.