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Wall Street shares mixed as traders position for rate hikes, oil jumps

Wall Street shares were mixed on Tuesday and the dollar slipped from a 16-month high as investors positioned for interest rate hikes in 2022 after Federal Reserve Chairman Jerome Powell was nominated for a second term.

The Nasdaq Composite fell for the second consecutive day as higher interest rates appeared to put pressure on high-flying tech stocks, but shares of banks and industrial names moved higher in a split market on Tuesday.

The tech-heavy index fell 0.50% to 15,775.14, while the S&P 500 ticked up 0.17% to close at 4,690.70. The Dow Jones Industrial Average rose 194.55 points to 35,813.80 on the strength of bank and energy stocks.

The decline in tech and other growth stocks comes as Treasury yields have jumped following President Joe Biden’s decision to select Fed Chair Jerome Powell for a second term on Monday. Higher rates are often seen as a negative for high-growth companies because their future earnings look less attractive as short-term yields rise.

Energy stocks climbed even after President Joe Biden announced on Tuesday that he would tap the strategic petroleum reserve in an attempt to lower gas prices at a time when inflation is running at its highest level in three decades. The price of oil had declined in recent days amid rumors that Biden would take this step but reversed higher on Tuesday.

European shares slumped to a three-week low during their biggest daily loss in nearly two months as a resurgence in COVID-19 cases raised fears of tighter restrictions.

Reference: CNBC, Reuters