Dow Off Lows Amid Tech Wreck as Powell Shrugs Off Inflation Fears

By Yasin Ebrahim

Investing.com - The Dow moved off lows but remained pressured Thursday, led lower by tech stocks on rising U.S. rates after Federal Reserve Chairman Jerome Powell offered no clues on tweaking monthly bond purchases and shrugged off investor fears about rising inflation.

The Dow Jones Industrial Average fell 1.07%, or 335 points, the S&P 500 fell 1.24%, and the Nasdaq Composite fell 1.8%.

Powell said the central bank would continue the current pace of bond buying despite the sharp jump in U.S. rates as inflation was unlikely to spiral out of control. The U.S. United States 10-Year Treasury jumped above 1.5%, while the United States 30-Year rose to a more than one-year high.

Powell said the pace of the increase in rates last week "was something that was notable and caught my attention," but reiterated that asset purchases will continue "at least at the current level" until substantial further progress was made toward the central bank's goals. "That's actual progress, not forecast progress," he added.

The Fed chief's reluctance to shift away from the central bank's ongoing narrative that current monetary policy measures remain appropriate, against the backdrop of investor concerns about inflation and rates, exacerbated investor uncertainty. That sparked a wave of volatility, adding fuel to the tech-led sell off.

Higher-priced growth names felt the heat, including Peloton Interactive (NASDAQ:PTON), DocuSign (NASDAQ:DOCU), Square (NYSE:SQ) and Tesla (NASDAQ:TSLA), which traded lower.

Semiconductor stocks, which have been one the best performing sectors over the past year, were also down, led by Micron Technology (NASDAQ:MU) as chip shortage, which has forced semis to rein in production, compounded selling the sector. Marvell (NASDAQ:MRVL) slumped 10% after its warning that the chip shortage would hamper its output this year offseting in-line first-quarter earnings.

Beyond tech, energy bucked the trend, rising 1%, on a sharp jump in oil prices after OPEC and its allies agreed to keep production steady through April. Saudi Arabia, which was pushing against calls to increase global supply, said it would extend its one million barrels per day voluntary production cut into April to allow Russia and Kazakhstan to increase production.

In other news, used car retailer Vroom (NASDAQ:VRM) slumped 31% to a 52-week low after reported a wider-than-expected Q4 loss.

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