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Nasdaq slides as treasury bonds rise after Jerome Powell nomination

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Nasdaq slides as treasury bonds rise after Jerome Powell nomination
The Nasdaq Composite fell 1.26% after previously hitting an intraday record Monday after President Joe Biden nominated Jerome Powell to remain as Federal Reserve chairman. File Photo by John Angelillo/UPI | License Photo

Nov. 22 (UPI) -- The Nasdaq Composite slid on Monday as treasury bonds rose after President Joe Biden nominated Jerome Powell to remain as chairman of the Federal Reserve.

The tech-heavy index fell 1.26% as the 10-year treasury yield rose to 1.625 and the S&P 500 closed the day down 0.32%.

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Both indexes had hit intraday records earlier in the day, but the Dow Jones Industrial Average ended up gaining just 17.27 points, or 0.049%, after rising as much as 328 points earlier in the session.

Biden on Monday nominated Powell, who was appointed by former President Donald Trump, for a second term with Lael Brainard as vice chairman, citing economic recovery after COVID-19.

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During his tenure, Powell has slashed interest rates to near zero, although the central bank is expected to hike rates by 2023 and has laid out plans to taper its pandemic bond-buying program.

"The most important question in the moment right now is how high the Fed ultimately hikes interest rates," John McClain, portfolio manager for Brandywine Global's high yield and corporate credit strategies, told Yahoo Finance. "Right now, expectations are about two-and-a-half to three hikes in 2022 and probably getting to about 175 basis points on Fed funds ultimately."

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Shares of bank stocks rose along with treasury yields as Morgan Stanley gained 2.5% and JPMorgan Chase increased 2.12%.

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Tech stocks posted early gains immediately after Powell's nomination when Apple rose 3% to reach an intraday high and Microsoft climbed 2% for its own record high, but retreated as bond yields rose with Apple closing the day up just 0.29% and Microsoft falling 0.96%.

Shares of Tesla gained 1.74% after CEO Elon Musk said its Model S Plaid vehicle could be launched in China by next spring while Moderna stock rose 7.17% after the Food and Drug Administration approved its vaccine booster for all U.S. adults.

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