NEW YORK CITY, RAW – Wall Street’s main indexes have fallen as big technology stocks were slammed by rising Treasury yields while Goldman Sachs led declines among banks after posting its quarterly profit below expectations.

Two-year Treasury yields, which track short-term rate expectations, crossed 1.0 per cent for the first time since February 2020 amid traders positioning for a more hawkish Federal Reserve ahead of a policy meeting next week.

Megacap firms including Google’s Alphabet, Apple, Meta, Amazon and Tesla fell between 0.6 per cent and 3.7 per cent.

Ten of the 11 major S&P 500 sectors fell in early trading, with the growth-heavy S&P 500 technology and S&P 500 communication services indexes leading losses.

“Tech is going to be bifurcated between the companies that are earning money today versus the companies that are promising to earn money tomorrow,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.


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“The companies that are promising to earn money tomorrow but not earning today are going to take big haircuts.”

Goldman Sachs plunged 8.0 per cent after missing fourth-quarter profit expectations on weak trading activity, while BNY Mellon shed 1.1 per cent after posting quarterly results.

The S&P 500 banks index fell 1.2 per cent while the broader financial index tumbled 1.6 per cent.

Energy was the only S&P 500 sector in the black on Tuesday as oil prices edged higher.

In early trading, the Dow Jones Industrial Average was down 553.58 points, or 1.54 per cent, at 35,358.23, the S&P 500 was down 68.82 points, or 1.48 per cent, at 4,594.03, and the Nasdaq Composite was down 253.06 points, or 1.70 per cent, at 14,640.69.

A monthly survey conducted by Deutsche Bank found that a majority of respondents believed US technology stocks are in a bubble as investors remained more bearish on hawkish policy moves and higher yields.

Later in the week, a US Senate panel is also set to debate a bill that aims to rein in app stores of companies that some lawmakers say exert too much market control, including Apple and Alphabet’s Google.

The Nasdaq and the S&P 500 fell for a second straight week on Friday as bearish sentiment on tech and disappointing results from big banks weighed on the US indexes made for a soft start to earnings season.

Bank of America and Morgan Stanley will post fourth-quarter results on Wednesday while Netflix will kick off reporting among big tech shares on Thursday.

Activision Blizzard surged 29.7 per cent after Microsoft said it would buy the videogame publisher for $US68.7 billion ($A95.6 billion) in cash, the largest deal in the sector.

Microsoft’s shares slid 1.3 per cent while other gaming stocks Electronic Arts, Roblox and Take-Two Interactive gained between 0.7 per cent and 7.3 per cent.

Airbnb dropped 3.4 per cent after Gordon Haskett cut the home rental firm’s shares to “hold”.

Declining issues outnumbered advancers for a 3.96-to-1 ratio on the NYSE and for a 3.87-to-1 ratio on the Nasdaq.

The S&P index recorded 30 new 52-week highs and six new lows while the Nasdaq recorded 54 new highs and 259 new lows.