Stocks sank on Tuesday as tech stocks extended their declines.
The S&P 500 was on track to fall for a sixth straight day for its longest losing streak since February 2020. The Nasdaq added to steep losses and dropped 2%, as investors rotated away from growth and tech shares. Shares of airlines, cruise lines, lodging companies and other service-based beneficiaries of a post-pandemic economic reopening added to Monday’s gains, and cyclical sectors including energy and financials were poised to outperform anew.
Optimism over another round of fiscal stimulus to help support the economy has helped boost shares of companies levered to a strong economic reopening. The U.S. House of Representatives Budget Committee voted to advance President Joe Biden’s $1.9 trillion virus relief proposal on Monday, bringing it a step closer to passage ahead of a mid-March cliff, after which federal unemployment benefits improved under the last round of relief in December are set to expire.
Investors this week have been eyeing a sharp move higher in Treasury yields, raising concerns of an unbridled surge in rates and borrowing costs for companies and inflationary pressure across the economy. The benchmark 10-year yield hovered around 1.36% for its highest level in a year, after wallowing below 1% for most of 2020…