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Sunday, April 18, 2021 | 05:36 am
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US Tech Stocks Lose Tug-of-War Amid Inflation Worries

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US Tech Stocks Lose Tug-of-War Amid Inflation Worries

Wall Street closed out a volatile week mostly higher on Friday, but tech shares once again lost the battle between optimism over a stronger economy and concerns about inflation.US Treasury yields jumped again, returning to the pre-pandemic levels of February 2020, as the 10-year note rose above 1.6 percent.

That is a sign of growing investor fears that the Federal Reserve will have to raise borrowing rates sooner than expected to contain inflation — despite the central bank’s assurances to the contrary. The tech-rich Nasdaq Composite Index recovered from the lowest point of the day, closing down 0.6 percent at 13,319.87.

The benchmark Dow Jones Industrial Average climbed 0.9 percent to 32,778.64, setting another record, while broad-based S&P 500 edged up 0.1 percent to 3,943.34, adding four points to the all-time high set Thursday. “There is a tug of war in the market regarding where inflation will settle,” Quincy Krosby of Prudential Financial said, with traders watching how President Joe Biden’s $1.9 trillion stimulus package will impact the economy, as well as the infrastructure package he’s pushing. “No one is suggesting at this point that we will be due for hyperinflation,” she said. But since the Fed has made it clear they will run the economy hotter, markets are now wondering, “how hot? “Tech shares are seen as most vulnerable to rising borrowing rates, and Apple and Amazon each lost 0.8 percent.

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