As worries grew that the Federal Reserve might not be finished raising interest rates, stocks declined on Wednesday, continuing the slow start to September.
A decline of 330 points, or 0.95%, was seen in the Dow Jones Industrial Average. While the Nasdaq Composite lost 1.5%, the S&P 500 fell 1.16%.
Increased Treasury yields put additional pressure on risky assets. In its most recent trading, the yield on the 2-year Treasury note increased by more than 6 basis points to trade above the 5% mark.
Technology equities performed poorly due to rate pressure. Nvidia and Tesla were the two largest losers, falling by more than 3% each. The Dow was impacted by Apple’s nearly 3% decline. Amgen and Boeing both had losses of more than 1% each.
Stronger-than-expected economic data on Wednesday, which sparked some concern about the potential of additional increases, coincided with an increase in Treasury yields. Recent indicators of the American economy’s manufacturing and service sectors both indicate that prices are heading in the wrong way.
The ISM “confirmed all the concerns that have been plaguing stocks for weeks – rising rates undercutting stock valuations, robust growth [and] sticky inflation keeping pressure on the Fed, solid growth giving a further premium to oil,” wrote Adam Crisafulli of Vital Knowledge in a report on Wednesday.
Source (CNBC)
