US stocks took a hit on Wednesday, with the S&P 500 notching its fourth consecutive loss as tech stocks led the market lower. The Nasdaq fell more than 1% as investors grappled with the prospect of higher interest rates following comments from Federal Reserve Chair Jerome Powell.
Nvidia was among the tech stocks hit hardest, with shares of the chip maker sliding nearly 4%. Other tech giants like Netflix, Meta, Apple, and Microsoft also saw declines throughout the day.
The recent hawkish comments from Powell have raised concerns among investors about the trajectory of interest rates. Powell indicated that the Fed may need more confidence that inflation is returning to its target before considering rate cuts, suggesting that rates could stay higher for longer than previously anticipated.
The release of the April Beige Book on Wednesday further fueled worries about inflation, with some central bankers expressing concerns about the potential for a resurgence in inflationary pressures.
Market expectations for a June rate cut have dwindled, with the CME FedWatch tool showing just a 16% chance of a rate cut at the June FOMC meeting. Investors are now projecting only 1-2 rate cuts by the end of the year, a significant decrease from earlier forecasts.
Investors will be closely watching for any additional guidance on Fed policy from officials in the coming days, as they seek clarity on the path of interest rates for the remainder of the year.
At the close of trading on Wednesday, the major indexes were down:
- S&P 500: [closing value]
- Dow Jones Industrial Average: [closing value]
- Nasdaq: [closing value]
In commodities, bonds, and crypto markets:
- West Texas Intermediate crude oil dropped 3.05% to $82.76 a barrel
- Brent crude 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
As investors continue to monitor developments in the market and await further guidance from the Fed, the future trajectory of US stocks remains uncertain.
