A significant increase in rates alarmed investors, causing the S&P 500 to decline on Thursday and snap an eight-day winning run.
While the Nasdaq Composite finished 0.94% lower at 13,521.45, the benchmark index fell 0.81% to close at 4,347.35. The Dow Jones Industrial Average closed at 33,891.94, down 220.33 points, or 0.65%.
Although the recent reduction in pace has been promising for policymakers, stocks reached session lows as Federal Reserve Chair Jerome Powell suggested more work may need to be done to reduce inflation.
“In prepared statements for an International Monetary Fund event, the Federal Open Market Committee stated that we are not confident that we have achieved a posture of monetary policy that is sufficiently restrictive to drive inflation down to 2 percent over time.”
Bond yields rose in tandem with the stock market’s downward movement. This was exacerbated by a lacklustre U.S. Treasury auction earlier in the day. With a rise of about 12 basis points to 4.634%, the benchmark 10-year Treasury yield was higher. About 11 basis points were added to the 30-year bond rate, bringing it to 4.772%.
Michael Arone of State Street Global Advisors stated, “Interest rate volatility is dominating the stock market.” “We have observed that.”
The chief investment strategist expressed optimism for the year’s end, saying, “I do think that we’re set up for a kind of nice finale.” But interest rate changes, in my opinion, will ultimately decide where we go from here.