- US stocks slumped on Wednesday, led by a sharp decline in tech stocks.
- The major indexes fell throughout the day, with the tech-heavy Nasdaq down more than 1%.
- Investors are grappling with the prospect of higher-for-longer interest rates after comments from Powell on Wednesday.
US stocks slid on Wednesday, with the S&P 500 ending with its fourth straight loss as tech stocks led the market lower and investors adjusted their rate expectations following this week’s hawkish comments from Jerome Powell.
Nvidia led the loss in tech through the session, with shares of the chip maker sliding by almost 4%. Tech titans like Netflix, Meta, Apple, and Microsoft all ticked lower, and the Nasdaq shed more than 1% on Wednesday.
Investors are coming to terms with the prospect of higher-for-longer interest rates, thanks to a hot inflation print for March and Powell’s recent guidance on rate cuts in 2024. The Fed Chair warned that central bankers needed more confidence that inflation was returning to its 2% target, implying rates would stay higher for longer than investors were expecting.
The Fed also rolled out its April Beige Book on Wednesday, which revealed some central bankers are concerned that inflation could see a resurgence.
“On balance, contacts expected that inflation would hold steady at a slow pace moving forward. At the same time, contacts in a few Districts—mostly manufacturers—perceived upside risks to near-term inflation in both input prices and output prices,” the Beige Book said.
Markets now see a June Fed rate cut as unlikely, pricing in just a 16% chance the Fed will cut at the June FOMC meeting, according to the CME FedWatch tool. Most investors are expecting just 1-2 rate cuts by the end of the year, per December interest rate projections, down from six rate cuts anticipated in January.
Investors are waiting on comments from Fed officials after the closing bell and throughout the day Thursday, which could give more guidance on the path of Fed policy through the rest of the year.
Here’s where US indexes stood at the 4 p.m. closing bell on Wednesday:
Here’s what else is happening today:
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil dropped 3.05% to $82.76 a barrel. Brent crude, the international benchmark, fell 2.9% to $87.41 a barrel.
- Gold slipped 0.55% to $2,369 per ounce.
- The 10-year Treasury yield fell seven basis points to 4.583%.
- Bitcoin dropped 3.06% to $61,063.
