- Starbucks is rising due to strong demand in the United States
- All eyes on the Fed’s policy statement at 14:00 ET
- Down indices: Dow 0.26%, S&P 0.57%, Nasdaq 1.47%
May 4 (Reuters) – Major Wall Street indexes fell on Wednesday as rising US bond yields hit stock growth ahead of a widely anticipated rise in interest rates, which may be the biggest since 2000.
Six of S&P’s 11 main sectors rose, with energy (.SPNY) and utilities (.SPLRCU) leading the way.
Shares of banks rose 0.3% after the two-year yield on the US Treasury, the most sensitive to Federal Reserve interest rate prospects, rose to its highest level since November 2018. The 10-year reference yield exceeded 3% for the third day in a row.
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Strengthening yields continued to haunt stocks by megacap. Microsoft Corp (MSFT.O), Google-parent Alphabet Inc (GOOGL.O), Meta Platforms (FB.O), Tesla (TSLA.O), Amazon.com (AMZN.O) and Nvidia (NVDA.O) have fallen between 1.5% and 4.1% and weighs on the S&P 500 and Nasdaq.
“There is this expectation that the Fed will raise (interest rates) by 50 basis points and that they will start to provide more color when it ends its balance sheet,” said Michelle Clover, portfolio strategist at Global X ETFs.
“All this is putting more pressure on growth stocks and putting pressure on increasing the profitability of your 10-year-old treasures.
Fed politicians have widely telegraphed an ambiguous decision that will raise the Fed’s short-term interest rate to between 0.75% and 1% and launch a plan to cut its balance sheet by $ 9 trillion. Read more
The statement of rules is at 14:00 EDT (18:00 GMT).
The focus will be on Fed Chairman Jerome Powell’s press conference on new clues as to how far and how quickly the central bank is ready to go in an effort to cut decades-long inflation.
Concerns about the Fed’s hawk, mixed profits from some big growth companies, the conflict in Ukraine and pandemic-related blockades in China have recently hit Wall Street, with high-priced growth stocks taking the burden of sales … off.
“There is still a lot of uncertainty in the economy, and you also see a slowdown in economic growth and headwinds around the world that could adversely affect profits and stocks in the future. I’m not ready to say it’s the bottom yet, but we’ve come down a lot, “Clover said.
Two separate datasets show that private employers have hired at least two workers since last month, while expansion in the services sector unexpectedly lost some momentum in April. Read more
At 11:38 ET, the Dow Jones Industrial Average (.DJI) fell 86.54 points, or 0.26%, to 33,042.25, the S&P 500 (.SPX) fell 23.62 points, or 0.57%, at 4,151.86 points, and the Nasq Composite (.IXIC) fell 184.93 points, or 1.47%, to 12,378.83.
Starbucks Corp. (SBUX.O) rose 5.5 percent after quarterly sales of the coffee chainsaw rose 12 percent in North America. Read more
Livent Corp (LTHM.N) grew 21.2% after reporting better-than-expected quarterly earnings and improving its revenue outlook for 2022 with higher demand for lithium used in electric vehicle batteries. Read more
Emission reductions outperform those increased by 2.03 to 1 on the NYSE and 2.46 to 1 on the Nasdaq.
The S&P index recorded a new 52-week high and 37 new lows, while the Nasdaq recorded 22 new highs and 297 new lows.
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Report by Devik Jain in Bengaluru; Edited by Shunak Dasgupta and Anil D’Silva
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