PPI growth hit a record, U.S. stocks continued to drop, technology stocks led the decline

On Tuesday, the market was worried about inflation and the prospect of economic growth, and U.S. stocks continued to decline. The Nasdaq and the Russell 2000 were still the weakest, down around 1%.

     The month-on-month and year-on-year growth of the U.S. PPI index in November exceeded market expectations, and the year-on-year growth hit the highest growth rate on record. Both the PPI and the CPI have soared, fueling concerns about inflation. Market expects the Fed to not only speed up its tapering of bond purchases, but also raise interest rates more aggressively. Some fund managers see the Fed's hasty tightening of monetary policy as the biggest downside risk for stocks in 2022. However, J.P. Morgan believes that the market is too worried about the Fed turning hawkish, and investors can take advantage of the retreat of high-growth stocks and Chinese concept stocks.

     Valuable growth stocks continued to sell off, with the tech sector the weakest performer. The software industry is particularly weak. J.P. Morgan downgraded ADBE's stock rating from overweight to neutral. The stock price fell 6.6%, and MSFT fell more than 3%.

     Treasury bond rates rose, financial stocks such as GS, BAC and JPM bucked the trend and rose, with the financial sector performing the best, up 0.6%.

The market opened low and the decline narrowed after midday. The Nasdaq fell below the 50-day average again, with poor breadth, and the ratio of gain and loss was 2 to 7. Although the Dow edged down 0.3%, it closed nearer the session low. The Nasdaq fell 1.1% to close in the upper-middle of the day's trading range, but if you factor in the gap, the Nasdaq closed in the lower-middle. Since November 22, the Nasdaq has fallen by more than 1% for 8 trading days, and the trading volume has increased, indicating that institutional funds are selling.