US Stocks Decline as Treasury Yields Spike Amid Fed Hawkishness
The US stock market declined on Wednesday as Treasury yields surged following hawkish remarks from Federal Reserve officials. The S&P 500 fell 0.8%, while the Nasdaq 100 lost 0.9% and the Dow Jones Industrial Average dropped 0.7%. This decline came despite hot purchasing managers' index readings, which stoked fears of steady economic momentum and potential further interest rate hikes.
Fed Governor Michael Barr stated that 'further policy adjustments are likely to be needed' to control inflation. Boston Fed's Sarah Collings made similar comments earlier this week. The 10-year Treasury note climbed to a multi-year high, reaching 5.135%, while the 2-year Treasury rate advanced to 4.947%.
Key stocks like Amazon.com Inc. (AMZN) and Alphabet Inc.'s (GOOGL) YouTube are also facing challenges as they navigate the current market landscape. Microsoft (MSFT) is rolling out a new regional investment framework focused on technology, digital resilience, and workforce development across various countries in the Middle East.
The VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) fell about 1.3% due to weakness in Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and Micron Tech (MU). The broader Vanguard Information Technology ETF (VGT) declined by about 0.4%, with gains in cybersecurity stocks limiting further downside.