(Reuters) – Wall Street indexes fell on Wednesday as concerns about the timing and scale of interest rate cuts by the Federal Reserve pushed up Treasury yields and pressured stocks.
Megacaps Microsoft, Alphabet and Meta declined between 0.3% and 0.6% after US bond yields rose to a four-week high following Tuesday’s unexpectedly strong data on consumer confidence.
Download a list of 10 small-cap stocks that experts say have growth potential in the coming months and years
continues after ad
The Dow Jones slid into losses, falling to its lowest level in nearly a month, and every major subsector of the S&P 500 was in the red in early trading.
Conflicting expectations over the size and timing of interest rate cuts have kept markets on edge since the start of this year.
Traders began the year expecting a rate cut in March, but persistent inflation and dovish comments from central bank officials have dampened expectations for a 25 basis point cut in November or December, according to the CME’s FedWatch tool.
continues after ad
“The Fed is in a dilemma with strong growth numbers and yet no visible response to inflation,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
The Nasdaq retreated after closing above 17,000 points for the first time on Tuesday. Chip stocks, which had gained in the previous session, fell 1.9%.
The Dow Jones fell 0.91% to 38,500.78. The S&P 500 fell 0.69% to 5,269.17, while the Nasdaq Composite fell 0.52% to 16,932.01.
