QQQ down 4.4%
On October 10, Wall Street had its worst day in eight months as markets experienced a sell-off that dragged ETFs and stocks lower. The Dow Jones Industrial Average (DJI) lost 832 points, or 3.2%. The SPDR S&P 500 ETF (SPY) was down 3.2% as well. The technology sector was the worst performer with the Invesco QQQ Trust (QQQ) losing 4.4% and the Technology Select Sector SPDR ETF (XLK) down 4.8%.
So was this just a minor correction as markets reach all-time highs or will the sell-off intensify over the next few days?
Investors wary of rising rates
The sell-off was driven by investor concerns about rising interest rates. Historically, higher interest rates have impacted economic growth, as the cost of credit rises, which reduces borrowing capacity. The ten-year US Treasury yield is close to its ten-year high of 3.2%. Mortgage and automobile loans are closely tied to Treasury yield rates.
However, Jamie Cox from Harris Financial Group was not too worried and believes this sell-off to be different from the one witnessed in February this year. Cox stated, “This was way different than February and March. In February, everything got shellacked. Even banks didn’t get hit that bad today. It wasn’t what you’d expect in a full-blown washout sell-out. To me, that was the most important piece, that this is not going to herald something worse.”
In the next articles, we’ll look at how stocks across the tech sector were impacted.