By DAMIAN J. TROISE (AP Business Writer)
NEW YORK (AP) — Stocks fell broadly on Wall Street Thursday and Treasury yields are again bumping up against multiyear highs a day after the Federal Reserve indicated that its fight against inflation is far from over.
The S&P 500 fell 0.7% as of 10:28 a.m. Eastern. The Dow Jones Industrial Average fell 134 points, or 0.4%, to 32,015 and the Nasdaq fell 0.8%.
Technology stocks were among the biggest weights on the market. Apple fell 2.8%.
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 raises interest rates. That has prompted mortgage rates to more than double this year and it continues putting pressure on stocks.
The Fed on Wednesday added another jumbo rate increase and suggested that the pace of rate hikes may slow. The central bank also indicated that interest rates might need to ultimately go even higher than previously thought in order to tame the worst inflation in decades.
The central bank’s latest three-quarters of a percentage point raise brings short-term interest rates to a range of 3.75% to 4%, its highest level in 15 years. Wall Street is evenly split on whether the central bank ultimately raises rates to a range of 5% to 5.25% or 5.25% to 5.50% next year.
Higher rates not only slow the economy by discouraging borrowing, they also make stocks look less appealing compared to lower-risk assets like bonds and CDs.
Stubbornly hot inflation has been prompting central banks around the world to also raise interest rates. On Thursday, the Bank of England announced its biggest interest rate increase in three decades. The increase is the Bank of England’s eighth in a row and the biggest since 1992.
European and Asian markets were lower.
Investors had been hoping for economic data signaling that the Fed might ease up on rate increases. The fear is that the Fed will go to far in slowing the economy and bring on a recession.
Hotter-than-expected data from the employment sector this week has so far signaled that the Fed has to remain aggressive. On Friday, Wall Street will get a broader monthly employment update from the U.S. government.
Wall Street has also been closely watching the latest company earnings reports. The reports have been mixed and many companies have warned that inflation will likely continue pressuring operations.
Booking Holdings rose 3.7% after reporting strong third-quarter financial results. Chipmaker Qualcomm fell 9.7% after giving investors a weak profit and revenue forecast.
Joe McDonald and Matt Ott contributed to this report.