Stocks took a beating today as the Dow Jones Industrial Average ended the trading day down 425 points, 1.73 percent. The market had a slight uptick from mid-day as the stock exchange was reporting the Dow was down at least 600 points at one point. The Nasdaq also did not fair well as the index fell by 121 points, 1.7 percent.
The Dow did not take the big hit following any controversial news from the White House, though. Axios reports that the drop was caused by three primary factors.
The first time since 2014, 10-year Treasury yields hit three percent. Analysts claim that the four-year high could spur some big investors to take money out of stock investments and put it into bonds citing continued inflation troubles.
“It’s more of a demand-driven move,” said Jim Bianco, head of the Chicago-based advisory firm Bianco Research, CNBC reports. “People are concerned that inflation is going to stay sticky.”
The tech industry was the main driver of the market losses today as Wall Street analysts lowering profit estimate from tech giant Google, which lost $36 billion. Moreover, Facebook, Amazon, Netflix, and Alphabet, formerly known as Google, also known in the industry as the “FANG” stocks, took big losses, a combined $84 billion in market value lost just in today’s trading session.
Even after the sharp drops Tuesday, two FANG stocks are tracking up this year. Netflix is still up more than 55 percent year-to-date followed by Amazon’s nearly 25 percent year-to-date gain, according to CNBC.
Bradley Halverson, CFO of Caterpillar, the heavy equipment and machinery manufacturer, told market analysts earlier the the first financial quarter would be, “the high watermark of the year.” Nonetheless, Caterpillar easily beat quarterly earnings estimates, but still finished down more the six percent at the end of the trading day.
TheStreet reports that Halverson also said that following the steel and aluminum tariffs announced a few weeks ago, there will most likely be losses stemming from other commodities that dependent upon the pricing from that market.
“We expect steel and other commodity costs to be a headwind all year,” he said.