Stocks and bonds got slammed on Wall Street Tuesday after disappointing earnings from Goldman Sachs dragged down the Dow and financial stocks, while a spike in benchmark Treasury yields to two-year highs dealt a blow to rate-sensitive tech titans like Apple and Amazon.
Trader Jeff Tomasulo of Vespula Capital says the sell-off could steepen much further.
“We are seeing now people trying to figure out trying to jockey around with how they're gonna rebalance their portfolios, knowing that going forward that we're going to have higher interest rates and that we're going to have a taper in that the sugar bowl, or whatever you want to call it, is getting pulled away.”
The Dow dropped nearly 550 points or one-and-a-half percent. The S&P 500 slid 1.8%. The Nasdaq cascaded over two-and-a-half percent.
Goldman Sachs shares tumbled 7%. Weakness in its trading business helped yank quarterly profit down almost 13%, falling short of Wall Street’s targets.
Microsoft finished down 2.4%, making it the biggest drag on the S&P and Nasdaq. It’s paying nearly $69 billion to buy video game publisher Activision Blizzard. Shares of the maker of the “Call of Duty” franchise shot up by more than a fourth, making it the biggest gainer on both indexes.