May 2 (Reuters) –
Investors adopted a cautious tone ahead of the Federal Reserve meeting this week. As policymakers are widely expected to raise interest rates. Wall Street’s main indexes fell on Monday, giving up early gains in volatile trading.
Traders positioned themselves for an expected half-point rate hike and the launch of “quantitative tightening. As central bank reduces its balance sheet after buying bonds to support the economy during the pandemic, as the yield on ten-year U.S. Treasuries hit 3% for the first time in more than three years, complementing the weaker sentiment in equity markets.
Higher borrowing costs tend to harm corporate share values, since they make it more expensive to pursue expansion plans. In addition to serving as a barometer for mortgage rates and other financial instruments.
As a result of traders preparing for this climate, high-growth stocks, like; technology companies, have taken a beating this year. Withh the tech-heavy Nasdaq losing about 22% in 2022.
A spate of dismal earnings announcements from megacaps have exacerbated losses in recent days.