Concerns about the cost of infrastructure spending and potential tax hikes to pay for the massive pandemic relief bill spooked investors, sending Wall Street lower Tuesday.
Putting investors on alert: testimonies before Congress by the top two U.S. economic officials. Treasury Secretary Janet Yellen defended plans for future tax hikes to pay for new public investments. Treasury yields fell, pulling down energy and financial stocks, as Fed Chair Jerome Powell, told Congress price hikes won’t get out of hand.
The Nasdaq fell more than 1%. The S&P 500 lost three-quarter percent, and the Dow pulled back nine-tenth percent.
Since hitting the market’s pandemic low exactly one year ago, stocks have skyrocketed. The S&P 500 has bounced back 78%.
Systematic Ventures CEO Max Wolff says stock prices have gotten overextended:
“I don't think anybody serious thinks these prices are justified.I think what people in the markets ask themselves is a different, more vital question in our industry which is. Could it go further and do I wanna be the guy who sits out talks about, you know, cirrhosis, while everybody's at the party of a lifetime.”
Shares of ViacomCBS tumbled 9%. The media giant plans to raise $3 billion in capital to invest in streaming.
After the markets closed, shares of GameStop dropped more than 6%. The videogame retailer at the epicenter of the meme stock trading frenzy fell short of Wall Street’s revenue targets.