The S&P 500 ends below 4000 for the first time since March 2021; growth shares lead to decline

NEW YORK, May 9 (Reuters) – The S&P 500 ended below 4,000 for the first time since March 2021 and the Nasdaq fell more than 4% on Monday in a sale led by mega-cap growth stocks as investors became more concerned about rising interest rates.

Nasdaq closed at its lowest level since November 2020. Apple (AAPL.O) shares fell 3.3% and were the largest weight on the Nasdaq and S&P 500.

Investors are worried about how aggressive the Federal Reserve must be to tame inflation. The US Federal Reserve raised interest rates by 50 basis points last week.

Benchmark 10-year US government interest rates reached their highest level since November 2018 early in the session.

“Markets are digesting the start of a return to a more normal monetary policy environment,” said Kristina Hooper, head of global marketing strategist at Invesco in New York.

“Moving more aggressively (on prices) increases the spectrum of a recession, especially with all these complications – high inflation, Russia’s invasion of Ukraine, covid-related supply chain disruptions,” she said.

Investors have also been concerned about an economic downturn in China following a recent increase in coronavirus cases.

The Dow Jones Industrial Average (.DJI) fell 653.67 points, or 1.99%, to 32,245.7, the S&P 500 (.SPX) lost 132.1 points, or 3.20%, to 3,991.24 and Nasdaq Composite (.521 or 4,521 points). 4.29% to 11,623.25.

Among the hardest hit in recent sales have been technology and growth stocks, whose valuations are more dependent on future cash flows.

The energy sector (.SPNY) sector fell 8.3% as oil prices fell.

Twitter Inc (TWTR.N) stock fell more than 3% when Hindenburg Research took a brief stance on the company on social media, saying the company’s $ 44 billion deal to sell itself to Elon Musk has a significant risk of get lower price. read more

Additional reporting from Devik Jain and Amruta Khandekar in Bengaluru; Edited by Shounak Dasgupta, Anil D’Silva and Aurora Ellis

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