By Joseph Adinolfi and William Watts
The Nasdaq has fallen for seven consecutive sessions. An earlier version of this story said it had fallen for nine sessions.
Stocks closed lower on Tuesday after a volatile session that saw the Dow swing roughly 400 points from peak to trough, while the Nasdaq Composite clinched its longest losing streak in six years.
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.49% retreated 173.14 points, or 0.6%, to close at 31,145.30.
The S&P 500 /zigman2/quotes/210599714/realtime SPX +0.40% fell 16.07 points, or 0.4%, ending at 3,908.19.
The Nasdaq /zigman2/quotes/210598365/realtime COMP +0.14% finished at 11,544.90, down 85.96 points, or 0.7%.
Major stock indexes fell for a third straight week on Friday, with the Dow posting a 3% weekly decline, the S&P 500 declining more than 3% and the Nasdaq Composite shedding 4.2%.
What drove markets
Lingering concerns about the economic fallout from a European energy crisis were again in focus on Tuesday, as was the Federal Reserve’s determination to dampen inflation by aggressively hiking interest rates.
Meanwhile, rising Treasury yields and a stronger dollar were seen weighing particularly on the Nasdaq, which recorded its seventh consecutive day in the red —the longest losing streak for the tech-heavy index since Nov. 4, 2016, according to Dow Jones Market Data.
Market strategists pointed to myriad factors weighing on stocks, which have been sliding for more than three weeks now.
“There’s not a lot of demand for stocks right now, people are nervous. As for the causes, I think part of it is psychology, partly the strong dollar and partly higher bond yields — they’re all part of the recipe here,” said Steve Sosnick, chief strategist at Interactive Brokers.
The higher yields and stronger dollar were both particularly negative for megacap tech stocks like Apple Inc., /zigman2/quotes/202934861/composite AAPL -0.58% Meta Platforms Inc. /zigman2/quotes/205064656/composite META +0.69% and Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +0.71% .
“We’ve seen an inverse relationship between tech stocks and long-term bond yields based on the notion that tech stocks are the ultimate long-duration asset. As yields spike, it creates big headwinds for stocks in general, and the leading tech stocks in particular,” Sosnick added.
Yields climbed across the Treasury curve /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y -2.11% , but long-dated bonds saw the biggest moves, with the 10-year yield up nearly 14 basis points at 3.337%. Meanwhile, the ICE U.S. Dollar Index /zigman2/quotes/210598269/delayed DXY -0.36% was back above 110, right around its strongest level in two decades.
The Russell 2000 /zigman2/quotes/210598147/delayed RUT +0.30% , a closely watched index of small-cap stocks, dropped more than 17 points, or 0.9%, to 1,793.12, falling for a seventh-consecutive session — its longest losing streak since Dec. 24, 2018, according to Dow Jones Market Data.