Treasury yields moved sharply higher on Monday and have seen further upside today, as several Federal Reserve officials reiterated the need to keep rates higher for longer. San Francisco Fed President Mary Daly said on Tuesday that there was no urgency to cut rates as inflation is still above the central bank's 2% target. Daly's echoed Cleveland Fed President Loretta Mester, who said she sees the fed cutting rates this year, but flagged pivoting to cuts too early rather than keeping them higher for longer was the bigger risk.
At closing bell, the Dow Jones Industrial Average index declined 396.61 points, or 1%, to 39,170.24. The S&P500 index was down 37.96 points, or 0.72%, to 5,205.81. The tech-heavy Nasdaq Composite index decreased by 156.38 points, or 0.95%, to 16,240.45.
Total 8 of 11 major S&P 500 sectors declined, with healthcare being bottom performer, down 1.62%, while energy sector being top performer, rising 1.37%.
Healthcare stocks declined on worries about the upcoming profits after the US government announced lower-than-expected rates for Medicare Advantage. Humana Inc, UnitedHealth Group, and CVS Health Corp were down.
ECONOMIC NEWS: The Commerce Department released a report showing factory orders surged by 1.4% in February after plunging by a revised 3.8% in January.
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