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Wall Street ended sharply lower on Thursday as Treasury yields surged to multi-year highs and investors grew worried that the Fed’s monetary tightening campaign could be in place for longer than expected following the FOMC meeting on Wednesday. All three major indexes ended in negative territory, with the S&P 500 and Nasdaq closing at their lowest since June.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plummeted 1.1% or 370.46 points to close at 34,070.42 points. The blue-chip index recorded its lowest close since July 10.
The S&P 500 declined 1.6% or 72.20 points, to finish at 4,330 points, its lowest close since June 26. Real estate, materials and consumer discretionary stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) fell 2.7%. The Technology Select Sector SPDR (XLK) and the Materials Select Sector SPDR (XLB) declined 1.5% and 2%, respectively. The Real Estate Select Sector SPDR (XLRE) tumbled 3.5%. All 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slipped 1.8% or 245.14 points to end at 13,223.98 points, posting its lowest close since June 7.
The fear-gauge CBOE Volatility Index (VIX) was up 15.85% to 17.54. A total of 10.76 billion shares were traded on Thursday, higher than the last 20-session average of 10.12 billion. Decliners outnumbered advancers on the NYSE by a 5.89-to-1 ratio. On the Nasdaq, a 2.80-to-1 ratio favored declining issues.
Investors Fear Recession, Treasury Yields Climb
Stocks tumbled for the third consecutive session on Thursday as fears of a potential recession grew following the Fed’s comments at the end of its two-day FOMC meeting on Wednesday. The Fed said that another rate hike of a quarter percentage would be required this year before it starts to cut rates in 2024.
However, the central bank also revised its forecast of four rate cuts to two next year, indicating that interest rates would remain high through 2024. This reignited fears that the economy could slip into a recession.
Moreover, higher interest rates could be problematic for high-growth assets like tech stocks. Treasury yields which had somewhat stabilized after hitting multi-year highs earlier this month soared once again on Thursday following the Fed’s outlook for future interest rate hikes.
The 10-year Treasury yield rose 4.494% before closing at 4.479%, jumping 13.3 basis points to hit its highest level since October 2007.
The 2-year Treasury yield climbed to 5.202%, reaching its highest level since 2006. Tech stocks suffered once again. Shares of NVIDIA Corporation ((NVDA - Free Report) ) declined 2.9%. Also, Tesla, Inc. ((TSLA - Free Report) ) and Apple, Inc. ((AAPL - Free Report) ) fell 0.9% and 2.5%, respectively. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
In other economic data released on Thursday, the Labor Department said that jobless claims totaled 201,000 for the week ending Sep 16, a decrease of 20,000 from the previous week’s unrevised revised level of 221,000. The four-week moving average was 217,000, a decrease of 7,750 from the previous week’s revised average of 224,750.
Continuing claims came in at 1,662,000, a decrease of 21,000 from the previous week’s revised level of 1,683,000. The 4-week moving average was 1,687,000 a decrease of 8,750 from the previous week's revised average of 1,695,750.
The National Association of Realtors said that existing home sales fell 0.7% in August to a seasonally adjusted annual level of 4.04 million. Year over year, sales declined 15.3% in August.
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Stock Market News for Sep 22, 2023
Wall Street ended sharply lower on Thursday as Treasury yields surged to multi-year highs and investors grew worried that the Fed’s monetary tightening campaign could be in place for longer than expected following the FOMC meeting on Wednesday. All three major indexes ended in negative territory, with the S&P 500 and Nasdaq closing at their lowest since June.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) plummeted 1.1% or 370.46 points to close at 34,070.42 points. The blue-chip index recorded its lowest close since July 10.
The S&P 500 declined 1.6% or 72.20 points, to finish at 4,330 points, its lowest close since June 26. Real estate, materials and consumer discretionary stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) fell 2.7%. The Technology Select Sector SPDR (XLK) and the Materials Select Sector SPDR (XLB) declined 1.5% and 2%, respectively. The Real Estate Select Sector SPDR (XLRE) tumbled 3.5%. All 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slipped 1.8% or 245.14 points to end at 13,223.98 points, posting its lowest close since June 7.
The fear-gauge CBOE Volatility Index (VIX) was up 15.85% to 17.54. A total of 10.76 billion shares were traded on Thursday, higher than the last 20-session average of 10.12 billion. Decliners outnumbered advancers on the NYSE by a 5.89-to-1 ratio. On the Nasdaq, a 2.80-to-1 ratio favored declining issues.
Investors Fear Recession, Treasury Yields Climb
Stocks tumbled for the third consecutive session on Thursday as fears of a potential recession grew following the Fed’s comments at the end of its two-day FOMC meeting on Wednesday. The Fed said that another rate hike of a quarter percentage would be required this year before it starts to cut rates in 2024.
However, the central bank also revised its forecast of four rate cuts to two next year, indicating that interest rates would remain high through 2024. This reignited fears that the economy could slip into a recession.
Moreover, higher interest rates could be problematic for high-growth assets like tech stocks. Treasury yields which had somewhat stabilized after hitting multi-year highs earlier this month soared once again on Thursday following the Fed’s outlook for future interest rate hikes.
The 10-year Treasury yield rose 4.494% before closing at 4.479%, jumping 13.3 basis points to hit its highest level since October 2007.
The 2-year Treasury yield climbed to 5.202%, reaching its highest level since 2006. Tech stocks suffered once again. Shares of NVIDIA Corporation ((NVDA - Free Report) ) declined 2.9%. Also, Tesla, Inc. ((TSLA - Free Report) ) and Apple, Inc. ((AAPL - Free Report) ) fell 0.9% and 2.5%, respectively. NVIDIA carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Economic Data
In other economic data released on Thursday, the Labor Department said that jobless claims totaled 201,000 for the week ending Sep 16, a decrease of 20,000 from the previous week’s unrevised revised level of 221,000. The four-week moving average was 217,000, a decrease of 7,750 from the previous week’s revised average of 224,750.
Continuing claims came in at 1,662,000, a decrease of 21,000 from the previous week’s revised level of 1,683,000. The 4-week moving average was 1,687,000 a decrease of 8,750 from the previous week's revised average of 1,695,750.
The National Association of Realtors said that existing home sales fell 0.7% in August to a seasonally adjusted annual level of 4.04 million. Year over year, sales declined 15.3% in August.