- US tech stocks led the market lower on Tuesday as interest rates surged amid an ongoing debt ceiling standoff.
- The 10-Year US Treasury yield hit a high of 1.56% on Tuesday, representing its highest level since June.
- Fed Chairman Jerome Powell warned Congress that a jump in inflation could last longer than expected.
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US stocks tumbled on Tuesday, with the Nasdaq 100 leading the market lower amid a surge in interest rates due to inflation fears and an ongoing debt ceiling standoff in Congress.
The 10-Year US Treasury yield hit a high of 1.56% on Tuesday, representing its highest level since June as Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen testified to Congress. Powell warned that a jump in inflation could last longer than expected as pressures impacting inflation last longer than expected.
Meanwhile, Yellen told Congress that if the US debt ceiling isn't raised before the Treasury runs out of money, which is estimated to be around October 18, interest rates could continue to spike higher as investors around the world lose faith in America's ability to pay its obligations.
"It would be a self-inflicted wound of enormous proportions" if the US doesn't raise the debt ceiling in time, causing a "financial crisis," Yellen told Congress.
Here's where US indexes stood at the 4:00 p.m. ET close on Tuesday:
- S&P 500: 4,352.61, down 2.04%
- Dow Jones Industrial Average: 34,299.60, down 1.63% (569.77 points)
- Nasdaq Composite: 14,546.68, down 2.83%
Shares of mega-cap tech stocks Amazon, Alphabet, Facebook, Apple, and Microsoft fell more than 2% in Tuesday trades.
Oil prices soared above $80 for the first time in three years as a shortage in natural gas spurs demand for the commodity.
Goldman Sachs cut its China GDP forecast for 2021 to 7.8% from 8.7%, warning that the economy's energy crunch represents another growth shock.
Ford jumped as much as 5% after the company re-upped its commitment to electric vehicles via the announcement of four new battery and electric vehicle plants that will cost more than $11 billion.
Alibaba said it will block sales of crypto mining equipment starting next month to comply with China's ongoing crackdown against cryptocurrencies.
West Texas Intermediate crude oil jumped as much as 0.95% to $76.17 per barrel before ultimately falling as much as 0.90%. Brent crude, oil's international benchmark, jumped 0.62% to $80.02 per barrel before falling as much as 1.19%.
Gold fell as much as 1.05%, to $1,733.60 per ounce.