The tech fears will dominate Wall Street markets this week with earnings scheduled from some of the leaders of the sector in Amazon, Facebook and Alphabet (see separate story).
But don’t discount the impact of the sell-off in US bond markets which emerged late last week.
The yield on the key 10-year Treasury bond rose to its highest level in more than four years and steepened the yield curve after two weeks of flattening which had left analysts wondering.
The flattening of the yield curve had analysts concerned the market was sending contradictory messages – worrying less about rates and inflation and more concerns about the health of the economy.
But the spread between 2- and 10-year bond yields rose for three straight sessions, rebounding from 41 basis points on Wednesday, the smallest gap in more than a decade to just on 50 points by the close on Friday, a significant movement.
The yield on 10 year bonds rose 4.4 basis points to 2.962% on Friday, the highest since January 2014, before settling at 2.9602% and within sight of cracking the 3% for the first time in almost five years.
Contributing to the uncertainty about yields are the burgeoning bond sales by the US Treasury to finance the soaring deficits and spending from the tax cuts and congressional budget deal, and the Federal reserves gradual exit from its huge easing program.
The US dollar index rose to a two-week high against a basket of peer currencies, while the Aussie dollar eased a cent to end around 76.72 US cents.
Thanks to the 4% slide in Apple shares on Friday and smaller falls for its peers, the technology index was the biggest drag on the S&P 500 dropping 1.5%, registering three straight days of losses ahead of the key earnings week for the sector.
As a result Wall Street’s three major indexes fell on Friday.
The Dow fell 201.95 points, or 0.8%, to 24,462.94 but ended the week 0.4% higher.
The S&P 500 lost 23 points, or 0.85%, to 2,670.14 with ten of the 11 main indexes ending with losses. The benchmark index rose 0.4% gain over the week, however.
The Nasdaq dropped 91.93 points to 7,146.13, a decline of 1.3%. Over the week, the tech-heavy index rose 0.5%.
