Nasdaq slides over 1% as growth stocks fall after hawkish Fed drives up yields
By Ankika Biswas and Shristi Achar A
(Reuters) — Nasdaq led declines in key Wall Street indexes on Thursday as a jump in Treasury yields knocked down growth stocks after the Federal Reserve signaled that another rate hike was in the offing this year.
Rate-sensitive stocks including Tesla (NASDAQ:TSLA), Meta Platforms (NASDAQ:META), Amazon.com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Nvidia (NASDAQ:NVDA) fell between 1.5% and 3.0% as the two-year and 10-year Treasury yields scaled multi-year highs. [US/]
Semiconductor firm Broadcom (NASDAQ:AVGO) slid 3.9% on report Alphabet-owned Google's executives discussed dropping the company as a supplier of artificial intelligence chips as early as 2027.
The report also said Google had been working to replace Broadcom as the supplier for networking chips used in its data centers with Marvell (NASDAQ:MRVL) Technology which rose 0.9%.
The Philadelphia chip index lost 1.1%.
The U.S. central bank delivered a widely anticipated pause on Wednesday and revised economic projections higher with warnings that the battle against inflation was far from over, prompting a weak session for Wall Street.
The benchmark interest rate could be hiked one more time in 2023 to a peak range of 5.50%-5.75%, while monetary policy could stay tighter than was expected through 2024, the Fed's updated quarterly projections showed.
«Our economists were expecting cuts in each of the four quarters of next year, but now they think the first cut will be delayed until sometime in the second quarter,» said Sam Stovall, chief investment strategist at CFRA Research in New York
Adding to rate jitters, U.S. jobless claims unexpectedly fell last week, while the Philadelphia Fed's business conditions index reading
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