The NASDAQ was down by more than 2% on Tuesday as shares in the world’s biggest tech companies fell, despite recent positive Q1 earnings.
Shares in the likes of Facebook, Apple, Amazon, Netflix and Google all were trading in the red in today’s session, a week on from all posting better than expected first quarter earnings.
This comes after the NASDAQ has been trading lower for the majority of the last week, and many believe this could be a sign that investors have been closing positions during this earnings season.
Many now wait to see if there will be a bounce back in upcoming days, as many typically buy whenever there is a dip in tech stock.
As of writing, the NASDAQ was trading 2.30% lower.
U.S. Factory order on the rise
Data released today from the United States showed that factory orders had risen in March, after falling earlier in the year.
Figures from the Commerce Department highlighted that factory orders rose by 1.1% in March after falling by 0.5% in the month prior.
This seems to be a sign that the recent $1.2 trillion stimulus package is having an effect, as many factory workers returned to work in this quarter.
Markets now wait to see what employment numbers will be this Friday, as Non-Farm Payrolls are released.
Expectations are that 980,000 jobs were added to the U.S. Labor market in April, which is the largest expected gain since the pandemic began.
Yellen gives interest rate warning
Former Federal Reserve chair Janet Yellen today warned that interest rates may need to be increased to prevent the U.S. economy “overheating”.
Speaking on a virtual economic seminar, the Treasury Secretary stated that, “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat”.
This comes as the recent stimulus package has spurred economic growth in the U.S, helping GDP rise by 64 in Q1 (annualized).
Consumer Spending has also risen, and Americans began to return to everyday life. On this she added, “Even though the additional spending is relatively small relative to the size of the economy, it could cause some very modest increases in interest rates”.
The next FOMC meeting will be on June 15th.
Quote of the day – “I believe in analysis and not forecasting.”– Nicolas Drava’s