US stocks tumble on rate worries, with Dow falling 2.1%
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A trader works on the floor of the New York Stock Exchange.
PHOTO: REUTERS
NEW YORK - Wall Street stocks finished decisively lower on Tuesday as angst over more United States Federal Reserve interest rate hikes in the pipeline added to the hit from retailers’ lacklustre forecasts.
The Dow Jones Industrial Average ended 2.1 per cent lower – down nearly 700 points – at 33,129.59.
The broad-based S&P 500 shed 2 per cent to 3,997.34, while the tech-rich Nasdaq Composite Index dropped 2.5 per cent to 11,492.30.
The rout came as the yield on the 10-year US Treasury climbed closer to 4 per cent, in the latest sign that markets expect more central bank actions to counter inflation and slow the economy.
The Fed walks a fine line trying to cool demand while avoiding tipping the world’s biggest economy into a recession.
Analysts said the pullback reflects recognition that hopes for a quick Fed pivot may have been unrealistic.
“Markets are realizing that they may have gotten ahead of themselves,” said Interactive Brokers chief strategist Steve Sosnick.
“The big speculation that we saw over the past few weeks seems to have been replaced by more sober thinking,” he noted.
Adding to the unease were downcast 2023 projections from big-box chains Walmart and Home Depot. Both companies acknowledged the drag of inflation and higher interest rates on consumer health.
Home Depot was the biggest loser in the Dow, falling 7.1 per cent, while Walmart mustered a 0.6 per cent gain.
Other Dow-listed companies with deep losses were Intel, down 5.6 per cent and 3M, down 3.3 per cent. AFP
