Nasdaq closes at 2-year low on falling chip stocks

US Stocks closed lower on Monday. Nasdaq Composite index hit lowest level in two years as tech shares were the hardest blow in the market because of thwarting interest rates exposing the high valuations of such shares and raise their cost of capital.

The declines came as JPMorgan CEO Jamie Dimon warned that the US would likely fall into a recession in 2023, and that it may not be just a mild economic contraction as some economists have projected.

The Nasdaq Composite closed 1.04% lower at 10,542.10, hitting its lowest close since July 2020, weighed down by a slump in semiconductor stocks such as Nvidia

The S&P 500 also fell 0.75% to 3,612.39, dragged down by semi stocks and dips in major tech names like Microsoft, while the Dow Jones Industrial Average shed 93.91 points, or 0.32%, to close at 29,202.88.

A policy change weighed on semiconductor stocks after the White House announced new export controls that limit US companies selling advanced computing semiconductors and related manufacturing equipment to China.

While the bond market was closed, futures on the 10-year Treasury note were lower in Monday trading indicating yields will continue their march higher on Tuesday. Yields move inversely to prices. The price of 10-year Treasury futures were lower by about 0.6%. Trading volume was also lower than usual on Monday due to the Columbus Day Holiday.