S&P 500 Stutters as Bulls Wary of Megacap Tech Despite Rate Retreat

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Investing.com – The S&P 500 huffed and puffed Tuesday, but ultimately struggled to cut its losses as megacap tech couldn’t find a way to return to the top of the list of fashionable investing despite a slip in U.S. bond yields. 

The S&P 500 was 0.2% lower, but had been down nearly 1%, the Dow Jones Industrial Average fell 31%, or 104 points, the Nasdaq Composite was down 0.1%, but had been down more than 1%.

Tech stocks closed off the lows as ({23705|U.S. rates}} turned negative after hitting 14-month highs, but with rates expected to resume their climb higher, investors continue to abandon longer-duration stocks.   

Google-parent Alphabet (NASDAQ:GOOGL) was exception to the selling in the so-called fab 5 stocks, while Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), and Facebook (NASDAQ:FB) ended lower.

As well as the impact of rising rates, Amazon was in the spotlight as investors await the results of a historic vote in Alabama that could establish the first union for Amazon workers.  

Tesla (NASDAQ:TSLA), meanwhile, racked up a 4% gain, helping the broader Nasdaq end above its lows, as investors digested bitter-sweet news.

Tesla warned it was facing problems scaling up production of its semi-truck, blaming battery tech supply issues. The electric automaker, however, is believed to be mulling a deal with Toyota to develop a small SUV platform, according to media reports.

Energy stocks also kept the broader market on the defensive, extending its weak start to the week ahead, as the risk premium in oil prices from supply disruptions linked to the Suez Canal saga faded after the container ship — that had blocked the key maritime trading route—was freed.

On the economic front, the U.S. consumer remains in good health as consumer confidence rose more than expected to its highest level since highest reading since July 2019. “With this increase, confidence has risen to the highest level since March 2020 (118.8),” Jefferies (NYSE:JEF) said.