Apple, Facebook And Microsoft Stocks Drop After Interest Rate Speculation
All it took was a suggestion from Treasury Secretary Janet Yellen that lending rates may rise to send the tech sector into a stock market fall.
Although interest rates are not expected to rise until 2024, Yellen’s comments to The Atlantic have caused a stir.
“It may be that interest rates will have to rise somewhat to make sure our economy does not overheat, even though the additional spending is relatively small relative to the size of the economy,” Yellen said.
“It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive.”
These quotes caused investors to shed tech stock, which forced Yellen to clarify her comments were neither a prediction nor a recommendation.
Overnight, Apple closed 3.5 percent lower, Microsoft dropped 1.6 percent and Facebook fell 1.3 percent.
The tech-heavy Nasdaq Composite Index also closed 1.9 percent lower.
It will be interesting to see if Yellen’s walk-back results in the stocks bouncing back today, once trading opens in New York.