Advertisment
U.S. stocks fell sharply on Thursday after Federal Reserve Chair Jerome Powell failed to reassure investors that the central bank would keep surging bond yields and inflation expectations in check.
The Dow Jones Industrials plunged 345.95 points, or 1.1%, to finish Thursday at 30,924.14
The S&P stumbled 51.25 points, or 1.3%, to 3,768.47.
The NASDAQ Composite thundered lower 274.28 points to 12,723.47, as growth stocks led the declines amid rising rates. Tesla shares dropped nearly 5%.
With Thursday’s steep selloff, the NASDAQ turned negative on the year with a 1.3% loss. The tech-heavy benchmark also fell into correction territory on an intraday basis, down more than 10% from its recent 52-week high.
Powell said the economic reopening could "create some upward pressure on prices," reiterating that the central bank would be "patient" before changing policy even as it saw inflation pick up in what it expects would be a transitory fashion.
The Fed chief did acknowledge the rapid rise in rates recently caught his attention, but said the Fed would need to see a broader increase across the rate spectrum before considering any action, he said during the Wall Street Journal Jobs Summit Thursday.
Additional stimulus measures could also inject optimism into the market. The Senate is currently debating the $1.9-trillion relief package passed by the House on Saturday. President Joe Biden has backed a plan to cut the income caps for Americans to receive stimulus checks.
Investors digested a better-than-expected reading on weekly jobless claims. First-time filings for unemployment insurance in the week ended Feb. 27 totaled 745,000, a touch below the Dow Jones estimate of 750,000, the U.S. Labor Department reported Thursday.
Prices for 10-Year Treasurys sagged, raising yields to 1.55% from Wednesday’s 1.47%. Treasury prices and yields move in opposite directions.
Oil prices gained $2.97 to $64.25 U.S. a barrel.
Gold prices plummeted $20.20 to $1,695.60.
