US stocks fell sharply on Wall Street Thursday a day after
the Federal Reserve hinted that its fight against inflation is far away from
over. Treasury yields are again moving up against multiyear highs.

The S&P 500 fell 39.70 points, or 1.06%, to 3,719.99 as
of 10:18 am Eastern time. The Dow Jones Industrial Average fell 251.55 points,
or 0.78%, to 31,896.21. The Nasdaq fell 142.34 or 1.35% to 10,382.45.

Technology stocks were the biggest losers on the market.
Apple fell 2.8%.

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The yield on the 10-year Treasury rose to 4.15% from 4.09%
late Wednesday. Bond yields are hovering around multiyear highs as the Fed
hikes interest rates. That has raised mortgage rates to more than double this
year and it continues putting pressure on stocks.

The Federal Reserve on Wednesday announce another massive
interest rate hike and signaled that the pace of rate hikes may slow. The
central bank also hinted that interest rates might need to ultimately go even
higher than previously thought to control the highest inflation in four
decades.

Also Read | US Federal Reserve hikes interest rates by 75 basis points

The central bank’s latest 75 basis points hike brings
short-term interest rates to a range of 3.75% to 4%, its highest level in 15
years. Higher interest rates not only slow the economy by making borrowing
expensive, but they also make stocks look less attractive compared to
lower-risk assets like bonds and CDs.

Record-high inflation has been prompting central banks
around the world to also hike interest rates. On Thursday, the Bank of England
announced its interest rate increase of 75 basis points, the highest in three
decades. The increase is the Bank of England’s eighth consecutive and the
biggest since 1992.

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Investors are waiting for economic data signaling that the
Fed might ease up on rate increases. The market is concerned that the Fed will
go too far in slowing the economy and bringing on a recession.

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Hotter-than-expected data from the job market this week has
so far indicated that the Fed has to remain aggressive. On Friday, the US
government will release broader monthly employment data. Wall Street has also
been closely watching the latest company earnings reports.