The Nasdaq fell nearly 2% on Tuesday, as Wall Street sold technology stocks from Apple and Nvidia to smaller growth stocks. The downturn comes after Wall Street largely shrugged off impressive first quarter results last week.
Investors also reacted negatively to Treasury Secretary Janet Yellens comments that the Fed may have to raise rates if Bidens spending plans go forward. Yellen later clarified that she doesnt think theres going to be an inflationary problem.
Tuesdays pullback has the Nasdaq trading about 4% below its recent records. And the recent downturn highlights a combination of high expectations, an impressive run, and the possibility of tech deceleration ahead (also read: Are Big Tech's Best Growth Days Behind It).
The technology titans remain safe long-term bets. Yet, given their outsized climbs off the coronavirus lows and the possibility of a sustained economic boom for the next several years, now might be time to consider stocks set to benefit from consumer spending.
Last week, the Commerce Department said U.S. GDP jumped by a seasonally adjusted annual rate of 6.4% in the first quarter, to put the economy within 1% of its pre-pandemic levels. And the latest round of stimulus checks helped propel a 4.2% month-over-month jump in spending in March, for the biggest climb since last summer.