Global MarketsWall Street Extends Drops Ahead of the Long-Expected Corporate Tax Hikes, to 26.5%

A Wall Street street sign is displayed in front of the New York Stock Exchange (NYSE) in New York, [Image: Bloomberg}

Wall Street lost ground on Tuesday as economic uncertainties and the increasing likelihood of a corporate tax rate hike dampened investor sentiment and prompted a broad sell-off despite signs of easing inflation.

Optimism faded throughout the trading session on wall street, reversing an initial rally following the Labor Department’s consumer price index report. All three major U.S. stock indexes ended in negative territory in a reminder that September is a historically rough month for stocks.

So far this month the S&P 500 is down nearly 1.8% even as the benchmark index has gained over 18% since the beginning of the year.

TradingView Chart
                                                                        The S&P 500 Index, one-year technical chart.

“There is a possibility that the market is simply ready to go through an overdue correction,” said Sam Stovall, chief investment strategist at CFRA Research in New York. “From a seasonality perspective, September tends to be the window dressing period for fund managers.”

The advent of the highly contagious Delta COVID variant has driven an increase in bearish sentiment on wall street regarding the recovery from the global health crisis, and many now expect a substantial correction in stock markets by the end of the year.

“We’re still in a corrective mode that people have been calling for months,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “Economic data points have been missing estimates, and that has coincided with the rise in the Delta variant.”

The CPI report delivered a lower-than-consensus August reading, a deceleration that supports Federal Reserve Chairman Jerome Powell’s assertion that spiking inflation is transitory and calms market fears that the central bank will begin tightening monetary policy sooner than expected.

U.S. Treasury yields dropped on the data, which pressured financial stocks, and investor favor pivoted back to growth at the expense of value.

The long-expected corporate tax hikes, to 26.5% from 21% if Democrats prevail, are coming nearer to fruition with U.S. President Joe Biden’s $3.5 trillion budget package inching closer to passage.

Wall Street Index Overview

The Dow Jones Industrial Average fell 292.06 points, or 0.84%, to 34,577.57; the S&P 500 lost 25.68 points, or 0.57%, at 4,443.05; and the Nasdaq Composite dropped 67.82 points, or 0.45%, to 15,037.76.

All 11 major sectors in the S&P 500 ended the session red, with energy and financials suffering the largest percentage drops.

Apple Inc unveiled its iPhone 13 and added new features to its iPad and Apple Watch gadgets in its biggest product launch event of the year as the company faces increased scrutiny in the courts over its business practices. Its shares closed down 1.0% and were the heaviest drag on the S&P 500 and the Nasdaq.

TradingView Chart
Apple Inc, six-month technical performance chart.

Intuit Inc gained 1.9% during trading on wall street following the TurboTax maker’s announcement that it would acquire digital marketing company Mailchimp for $12 billion.

CureVac slid 8.0% on wall street after the German biotechnology company cancelled manufacturing deals for its experimental COVID-19 vaccine.

Declining issues outnumbered advancing ones on the NYSE by a 2.25-to-1 ratio; on Nasdaq, a 2.40-to-1 ratio favoured decliners.

The S&P 500 posted two new 52-week highs and two new lows; the Nasdaq Composite recorded 50 new highs and 107 new lows.

Volume on U.S. exchanges was 10.07 billion shares, compared with the 9.38 billion average over the last 20 trading days.

This is where investors get first hand information, Securities real time feed & updates from Emerging & Frontier Markets worldwide with main focus on the Nairobi Securities Exchange.

Copyright, 2021 © All Rights Reserved

TSLA 
$774.39  $20.75  2.75%  
GME 
$185.16  $6.08  -3.18%  
MSFT 
$299.35  $0.2100  -0.07%  
AAPL 
$146.92  $0.0900  0.06%  
AMC 
$40.01  $0.0300  0.08%  
GMEQX 
$13.08  $0.0300  -0.23%  
FB 
$352.96  $7.00  2.02%  
TWTR 
$67.22  $0.5300  0.79%  
AIR.BE 
115,96 €  1,88 €  -1.60%  
ABNB 
$175.88  $0.7500  0.43%  
GOOGL 
$2,844.30  $19.98  0.71%  
AMZN 
$3,425.52  $9.52  0.28%