By Yasin Ebrahim
Investing.com -- The S&P 500 cut some losses late into close Monday to end roughly flat as investors appeared to buy the intraday dip in tech even as Treasury yields rose on growing expectations that the Federal Reserve may be forced to aggressively tighten monetary policy.
The S&P 500 fell 0.04%, the Dow Jones Industrial Average slipped 0.6%, or 201 points, the Nasdaq lost 0.40%.
Growth sectors of the market including tech ended the day well off the session lows despite a fresh surge in treasury yields after Powell said the Fed may have to move faster on rate hikes if inflation doesn't abate.
Powell said on Monday that as expectations of seeing inflation peaking in the first quarter “has already fallen apart,” a further ramp-up in inflation could force the central bank “to move more quickly.”
Meta Platforms (NASDAQ:FB) led the decline in the sector to the downside, following by Microsoft Corporation (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL).and Amazon (NASDAQ:AMZN), which ended in the session in the green.
Apple (NASDAQ:AAPL) closed nearly 1% higher as Foxconn, one of its biggest suppliers, said that its plants in Shenzhen, China, were nearly fully operational following suspension last week owing to a surge in Covid-19 cases in the region.
While the rising rate environment is expected to benefit value sectors of the market like energy and financials, some on Wall Street continue to favor tech.
"In this environment [...] prefer Information technology, communication services, and financials," Wells Fargo said in a note.
Energy stocks also offset some losses in the broader market, underpinned by a rising oil prices on fears of supply disruptions amid reports that the European Union is considering a ban on Russia oil.
The conflict in Ukraine, which dragged into its fourth week, shows little sign of abating as hopes fade for a diplomatic solution to end the war. President Joe Biden on Monday called Russia president Vladimir Putin a war criminal for his attacks on Ukraine. Biden also warned that Russia was planning to launch cyber attacks against the U.S.
Marathon Oil (NYSE:MRO), Diamondback Energy (NASDAQ:FANG) and Occidental Petroleum (NYSE:OXY) led energy higher, with the latter up more than 8%.
Consumer discretionary, meanwhile, was dragged lower by weakness in casino stocks including Caesars Entertainment (NASDAQ:CZR), and Penn National Gaming (NASDAQ:PENN) despite a favorable backdrop for sports betting activity as the NCAA's March Madness continued.
Tesla (NASDAQ:TSLA), however, bucked the trend lower in the sector, rising more than 1% ahead of the opening of the electric vehicle maker’s Gigafactory in Berlin on Tuesday.
Tesla rival Nio (NYSE:NIO) fell more than 2% as Deutsche bank cut its price target on the firm to $50 from $70, but touted optimism ahead on expectations that the Chinese EV maker is on track to increase deliveries to 25,000 a month from 10,000 a month this year. ]
Boeing (NYSE:BA), a major Dow component, fell more than 3% after China Eastern Airlines (NYSE:CEA) reportedly grounded its 737-800 fleet following a fatal crash in the mountains of southern China.
In other news, Alleghany (NYSE:Y) surged more than 24% after Berkshire Hathaway (NYSE:BRKa) announced plans to buy the insurance company for $11.6 billion.