Wall Street’s main indexes slid in choppy trading on Thursday as technology and growth stocks struggled for direction amid rising bond yields and weak risk appetite on concerns about rising inflation and aggressive interest rate hikes.
Nine of the 11 key S&P sectors declined in morning trade, with energy and materials taking the biggest hit. The defensive consumer staples sector was up 0.5%.
Apple Inc and Amazon.com fell 1%, pushing the S&P 500 and Nasdaq indexes down. Bank of America slid 1.7%, while the broader bank index fell 1.2%.
Rate-sensitive growth stocks are under pressure from the benchmark US 10-year Treasury yield, which climbed as much as 3.07% to its highest level since May 11.
Inflation concerns surfaced ahead of the US Consumer Price Index report on Friday as Brent crude prices rose above $123 a barrel.
Investors fear a hot reading on inflation could put the US Federal Reserve on its way to aggressively raise interest rates against a backdrop of a volatile stock market, strong consumer spending and a tight labor market.
“We are not going to see the market enjoy a strong recovery unless it senses that inflationary pressure is easing because it shows the Fed is moving in the right direction and the economy is weakening. Not harsh,” he said. Quincy Crosby, chief equity strategist at LPL Financial.
“The market has been in a tight trading range. Buying or selling, in any scenario, has been weak and is a sign of a market without commitment.”
The US central bank raised its short-term interest rate by three-quarters of a percentage point this year and intends to maintain it with a hike of 50 basis points at its meeting next week and again in July.
At 10:08 a.m., the Dow Jones Industrial Average was down 60.73 points, or 0.18%, at 32,850.17, the S&P 500 was down 9.04 points, or 0.22%, at 4,106.73, and the Nasdaq Composite was down 30.00 points, or 0.25. %, at 12,056.27.
Tesla Inc. rose 3.9% as the electric automaker sold 32,165 China-made vehicles last month, up from 1,152 in April. Brokerage UBS upgraded the stock to “buy” and raised its profit projections for the next three years.
Alibaba Group slipped 1.6% as its affiliate Ant Group said it had no plans to launch an initial public offering.
Reuters reported that China’s central leadership has given Jack Ma’s Ant Group a tentative green light to revive its initial public offerings in Shanghai and Hong Kong.
The CBOE Volatility Index, also known as Wall Street’s fear gauge, rose after two straight days of decline and last traded at 24.63 points.
Downtrend issues outweighed advances, leading to a 3.30-to-1 ratio on the NYSE and a 2.73-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 30 new lows, while the Nasdaq recorded 11 new highs and 56 new lows.
This story has been published without modification in text from a wire agency feed.