Nasdaq 100 Tumbles as Yellen Comments About Rate Hikes, Hang Seng and ASX 200 May Fall

By Margaret Yang8 days ago

NASDAQ 100, HANG SENG, ASX 200 INDEX OUTLOOK:

  • Dow Jones, S&P 500 and Nasdaq 100 closed +0.06%, -0.67% and -1.85% respectively
  • Janet Yellen’s interest rate comments sparked fresh tapering fears, boosting the US Dollar
  • Futures in Australia and Hong Kong are positioned for losses following a sour Wall Street lead

Tech Pullback, Janet Yellen, USD, Asia-Pacific at Open:

Nasdaq 100 index fell 1.85% on Tuesday as profit-taking ramped up on fresh tapering fears. US Treasury Secretary Janet Yellen said interest rates may have to rise moderately to keep the economy from overheating. Her words echoed comments from Dallas Fed president Robert Kaplan at the end of last week, who said it’s time to start debating a reduction in bond purchases amid signs of excessive risk-taking.

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Although Fed Chair Jerome Powell reiterated that current monetary policy is appropriate and inflation pressure may be transitory, a slew of robust economic data ignited tapering speculations recently. The central bank may need to consider withdrawing its asset purchasing program sooner to prevent asset bubbles and inflation overheat. Yellen and Kaplan’s comments strengthened tapering speculations, fueling another wave of sectoral rotation from growth into value stocks. Mrs. Yellen later clarified that she was not forecasting interest rate hikes. Technology sector is probably more vulnerable against the headwind, due to lofty valuations and sensitivity to interest rate changes.

Top 10 Stocks by Market Cap in the Nasdaq 100

Source: Bloomberg, DailyFX

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