NASDAQ Tumbles Again On Sudden Sell-off

The Nasdaq tumbled for a second straight session on Tuesday, and the S&P 500 also fell, as rising Treasury yields prompted investors to sell Tesla, Microsoft and other Big Tech names.

The weakness in the mega-caps is being attributed to profit taking amid concerns about higher interest rates. Presently, the 10-yr yield is up three basis points to 1.66%, and since Friday’s settlement, it’s up 12 basis points. Over the same time, the Vanguard Mega-Cap Growth ETF (MGK) is down 2.5%.

Another headwind is the disappointing earnings reactions in Zoom Video (ZM) and a bunch of retailers, including Best Buy (BBY), Dick’s Sporting Goods (DKS), Urban Outfitters (URBN), and Abercrombie & Fitch (ANF).

From a sector perspective, the information technology (-1.1%), consumer discretionary (-1.2%), and communication services (-0.7%) sectors, which are home to the mega-caps, are leading today’s decline. The energy (+3.2%) and financials (+1.1%) sectors, however, are outperforming for the second straight day in a rotation-minded trade.

Energy stocks are being further supported by higher oil prices after the White House announced the U.S. will release 50 million barrels of oil from the Strategic Petroleum Reserve over several months to help keep prices down. China, India, Japan, South Korea, and the UK will also release oil from their reserves.

Oil prices initially fell on the news, but they’re trading higher on the recognition that Bloomberg reported the U.S. was planning on announcing this today and that OPEC+ warned about reconsidering output increases in response.

Dollar Tree (DLTR) and Burlington Stores (BURL), meanwhile, have pleased investors with their earnings reports. Dollar Tree also said it’s making the permanent shift to making most merchandise cost $1.25.