US markets today: NASDAQ 100 extends pullback, falls 350 pts; Dow Jones rises as investors bet on defensive stocks

The US market extended its pullback on Thursday as investors continued to reassess the risks amid rising inflation and elevated borrowing rates. The NASDAQ 100 plunged over 300 points and the S&P 500 fell 0.2% on Thursday after a massive selloff in tech stocks in the Asian markets earlier today. Meanwhile, the Dow Jones surged over 200 points amid buoyancy in the defensive stocks.

Tech stocks extend fall

The Shares of chip makers like Micron Technology, Advanced Micro Devices, Marvell Technology, Intel Corporation, Qualcomm, and NVIDIA plunged as much as 5% on Thursday, amid elevated risks of higher borrowing costs and their impact on AI infrastructure spending.

Defensive bets rise

Investors in the US seem to have adopted sectoral rotation as they trim their exposure to the overheated technology sector and increase their bets on defensive sectors like consumer staples, retail, and F&B companies. Consequently, shares of retailers like Walmart Inc. jumped 2.8%, Amgen Inc.'s share price soared 1.8%, and Coca-Cola Company’s share price rose 1.7%. In addition, Johnson & Johnson, Mcdonald Corporation, Nike Inc., and Procter & Gamble Company also saw gains of up to 1.5%.

Bond yields cool off

Meanwhile, the bond yields retreated from Wednesday’s peaks amid a technical pullback from higher levels. The US 10Y yields fell to 5.05%, after hitting the 5.34% mark on Wednesday. Similarly, the 30Y yields fell below the 5.4% mark, and the 2Y yields dropped to the 4.7% mark after hitting nearly 5% on Wednesday, alleviating some fears.

Crude oil volatility continues

After posting a selloff in the earlier hours, Brent crude oil prices have recouped the majority of the intraday losses to trade back above $105 per barrel after hitting an intraday low of $103 per barrel on Thursday. Houthi rebels claim to have shot down Saudi Arabia’s fighter Jet, further escalating tensions in the region.

Asian market market rout

Taking cues from the overnight fall in US stocks on Wednesday, the tech stocks in Korea and Japan plunged to new three-month lows on Thursday. Shares of Korean chip-making giants like SK Hynix and Samsung Electronics plunged as much as 10% on Thursday, taking the Korean benchmark index KOSPI to hit circuit-breaker levels of 8%.