Stocks fell and bond yields rose on Tuesday, as statements by a Federal Reserve governor stoked Wall Street predictions that the central bank is poised to hike interest rates more aggressively and take other actions to curb growing inflation.
After a modest early gain, the SP 500 fell 1.3%. The Dow Jones Industrial Average dropped 0.8%, while the Nasdaq dropped 2.3%.
The S&P 500 suffered its first drop in three days. It had three straight weekly increases heading into this week, during which the market regained some of its footings following a slump in January and February due to growing prices, uncertainty about the Fed’s next interest rate policy movements, and the crisis in Ukraine.
The S&P 500 fell 57.52 points to 4,525.12. The Dow slid 280.70 points to 34,641.18, and the Nasdaq dropped 328.39 points to 14,204.17. Smaller company stocks fell more than the broader market. The Russell 2000 lost 49.40 points, or 2.4%, to close at 2,046.04.
Weakness from big technology stocks weighed down the broader market the most. Companies in the sector, with their pricey valuations, tend to push the market higher or lower more forcefully. Chipmaker Qualcomm fell 5.4%.
Twitter rose another 2% after disclosing an arrangement with Tesla chief Elon Musk that will give him a board seat but also limit how much of the company he can buy while he’s a director. The company disclosed a day earlier that the mercurial billionaire and Twitter critic had become the company’s largest shareholder.
The 10-year Treasury yield jumped to 2.56%, its highest level since April 2019, from 2.46%.
Wall Street is preparing for the next round of corporate earnings reports in the coming weeks. The results could give a clearer picture of how companies are dealing with the impact of rising inflation.
Carnival rose 2.4% after the cruise line gave investors an encouraging bookings update.
Spirit Airlines jumped 22.4% after JetBlue made a takeover bid for the discount airline. Spirit and rival Frontier Airlines announced in February that had agreed to combine in a $2.9 billion deal to create the nation’s fifth-largest airline by passenger-carrying capacity. Denver-based Frontier would have a controlling share.