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Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, breaks down market moves and explains why inflation is likely to stay sticky near 3 percent amid affordability pressures and tight labor supply.
US stocks extended losses, as a selloff in technology shares dragged global gauges from the brink of record highs. Bond yields climbed.
The Nasdaq 100 was down 1.3%. Broadcom Inc. dropped after its sales outlook fell short of lofty expectations. The S&P 500 sagged after the index notched a record close in the previous session. The Dow Jones Industrial Average pulled back from record highs. Treasury 10-year yields advanced to 4.18%.
Traders “are searching for alternative real assets, especially given the Federal Reserve rate cut and the possibility of more to come,” wrote Richard Hunter, head of markets at Interactive Investor. “The rotation also provides something of a hedge for investors, where concentration risk among the ‘Magnificent Seven’ in particular was becoming more of an issue.”
Diversification across geographies and themes is becoming a key consideration. After technology heavyweights drove equity gains for much of the year, concerns about stretched valuations and vast capital outlays have prompted investors to look for opportunities elsewhere.
“Given the set-up in markets, diversification is now the price worth paying to keep you fully invested in equities,” wrote Goldman Sachs’s Mark Wilson. He adds that there are compelling investment stories including Ko
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